EX-99.1 2 ex99_1.htm EXHIBIT 99.1 ex99_1.htm
Exhibit 99.1


NEWS RELEASE
 
Logo
 
 
Corporate Headquarters:
 
Dorman Products, Inc.
 
3400 East Walnut Street
 
Colmar, Pennsylvania 18915
 
Fax: (215) 997-8577
   
For Further Information Contact:
Visit our Home Page:
Mathias J. Barton, CFO
www.dormanproducts.com
(215) 997-1800 x 5132
  
E-mail: MBarton@dormanproducts.com
  


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:
 
·
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.
 
·
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.
 
·
Interest expense, net, decreased to $0.9 million in 2008 from $1.9 million in 2007 due to lower borrowing levels and interest rates.
 
·
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.

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)

   
13 Weeks
    
13 Weeks
  
Fourth Quarter (unaudited)
  
12/27/08
    
Pct.
    
12/29/07
    
Pct.
  
Net sales
   $ 80,687       100.0     $ 84,462       100.0  
Cost of goods sold
     54,875       68.0       56,343       66.7  
Gross profit
     25,812       32.0       28,119       33.3  
Selling, general and administrative expenses
     19,318       24.0       20,220       23.9  
Goodwill impairment
     -       -       414       0.5  
Income from operations
     6,494       8.0       7,485       8.9  
Interest expense, net
     146       0.1       305       0.4  
Income before income taxes
     6,348       7.9       7,180       8.5  
Provision for income taxes
     1,498       1.9       3,496       4.1  
Net income
   $ 4,850       6.0     $ 3,684       4.4  
Earnings per share
                                
Basic
   $ 0.27       -     $ 0.21       -  
Diluted
   $ 0.27       -     $ 0.20       -  
Average shares outstanding
                                
Basic
     17,649       -       17,699       -  
Diluted
     18,018       -       18,132       -  

   
52 Weeks
    
52 Weeks
  
Year to Date
  
12/27/08
    
Pct.
    
12/29/07
    
Pct.
  
Net sales
   $ 342,325       100.0     $ 327,725       100.0  
Cost of goods sold
     232,140       67.8       215,256       65.7  
Gross profit
     110,185       32.2       112,469       34.3  
Selling, general and
                                
administrative expenses
     81,781       23.9       78,083       23.8  
Goodwill impairment
     -       -       414       0.1  
Income from operations
     28,404       8.3       33,972       10.4  
Interest expense, net
     920       0.3       1,856       0.6  
Income before income taxes
     27,484       8.0       32,116       9.8  
Provision for income taxes
     9,671       2.8       12,923       3.9  
Net income
   $ 17,813       5.2     $ 19,193       5.9  
Earnings per share
                                
Basic
   $ 1.01       -     $ 1.08       -  
Diluted
   $ 0.99       -     $ 1.06       -  
Average shares outstanding
                                
Basic
     17,675       -       17,693       -  
Diluted
     18,049       -       18,132       -  

 
 
 

DORMAN PRODUCTS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands)

   
12/27/08
    
12/29/07
  
Assets:
            
Cash and cash equivalents
   $ 5,824     $ 6,918  
Accounts receivable
     77,101       76,897  
Inventories
     93,577       80,565  
Deferred income taxes
     11,626       10,111  
Prepaid expenses
     2,135       1,921  
Total current assets
     190,263       176,412  
Property & equipment
     25,053       25,680  
Goodwill
     26,553       26,662  
Other assets
     1,553       1,901  
Total assets
   $ 243,422     $ 230,655  
                 
Liability & Shareholders' Equity:
                
Current portion of long-term debt
   $ 86     $ 8,654  
Accounts payable
     21,900       18,752  
Accrued expenses and other
     8,040       10,718  
Total current liabilities
     30,026       38,124  
Long-term debt and other
     17,464       10,811  
Deferred income taxes
     8,088       7,862  
Shareholders' equity
     187,844       173,858  
Total Liabilities and Equity
   $ 243,422     $ 230,655  

 
 
 

Selected Cash Flow Information:
(in thousands)
  
13 Weeks (unaudited)
    
52 Weeks (unaudited)
  
   
12/27/08
    
12/29/07
    
12/27/08
    
12/29/07
  
Depreciation and amortization
   $ 1,965     $ 1,992     $ 7,672     $ 7,744  
Capital Expenditures
   $ 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:
 
-
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.
 
-
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.
 
-
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.

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:

 
 
 
 
   
13 Weeks (unaudited)
  
   
12/27/08
    
12/29/07
    
% Change
  
Net income, as reported
   $ 4,850     $ 3,684       31.7 %
                         
Less: Vacation adjustment, net of tax
     -       (274 )     N/A  
Less: Tax benefit upon disposition of subsidiary
     (673 )     -       N/A  
Add: Asset write down
     -       998       N/A  
                         
Net income, as adjusted
   $ 4,177     $ 4,408       -5.2 %
                         
Diluted EPS, as reported
   $ 0.27     $ 0.20       35.0 %
                         
Less: Vacation adjustment, net of tax
     -       (0.02 )     N/A  
Less: Tax benefit upon disposition of subsidiary
     (0.04 )     -       N/A  
Add: Asset write down
     -       0.06       N/A  
                         
Diluted EPS, as adjusted
   $ 0.23     $ 0.24       -4.2 %

   
52 Weeks (unaudited)
  
   
12/27/08
    
12/29/07
    
% Change
  
Net income, as reported
   $ 17,813     $ 19,193       -7.2 %
                         
Less: Vacation adjustment, net of tax
     -       (1,094 )     N/A  
Less: Tax benefit upon disposition of subsidiary
     (673 )     -       N/A  
Add: Asset write down
     -       998       N/A  
                         
Net income, as adjusted
   $ 17,140     $ 19,097       -10.2 %
                         
Diluted EPS, as reported
   $ 0.99     $ 1.06       -6.6 %
                         
Less: Vacation adjustment, net of tax
     -       (0.06 )     N/A  
Less: Tax benefit upon disposition of subsidiary
     (0.04 )     -       N/A  
Add: Asset write down
     -       0.05       N/A  
                         
Diluted EPS, as adjusted
   $ 0.95     $ 1.05       -9.5 %