8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): October 28, 2014

Dorman Products, Inc.

(Exact name of Registrant as Specified in Charter)

Pennsylvania	000-18914	23-2078856
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

3400 East Walnut Street, Colmar, Pennsylvania 18915

(Address of Principal Executive Offices)

Registrant’s telephone number, including area code: (215) 997-1800

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operation and Financial Condition.

The information being furnished in this Item 2.02 and in Exhibit 99.1 shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act except as shall be expressly set forth by specific reference in such filing.

On October 28, 2014, Dorman Products, Inc. (the “Company”) issued a press release announcing its operating results for the third quarter ended September 27, 2014. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated by reference herein.

Item 8.01. Other Events.

On October 28, 2014, the Company announced that its Board of Directors has authorized an expansion to and extension of the Company’s existing share repurchase program. Under this expansion, the Board of Directors has authorized an increase to the share repurchase program from $50 million to $100 million. During the third quarter ended September 27, 2014, Dorman repurchased 671,200 shares of its common stock for $30.7 million, at an average price of $45.80 per share. During the first six months of 2014, the Company has repurchased 161,900 shares of its common stock for $8.5 million, at an average price of $52.75 per share. During the first nine months of 2014, the Company has repurchased 833,100 shares of its common stock for $39.3 million, at an average price of $47.15 per share. In connection with the expansion, the Board of Directors has extended the expiration date of the share repurchase program from May 31, 2015 to December 31, 2015.

The Company’s repurchase of shares will take place in open market transactions in accordance with applicable securities and other laws, including the Securities Exchange Act of 1934. The Company intends to finance the purchase using its available cash and cash equivalents. The Board may modify, suspend, extend or terminate the repurchase program at any time.

Certain statements in this document constitute “forward-looking statements” within the meaning of the Federal Private Securities Litigation Reform Act of 1995, including statements related to future growth rates and the repurchase programs. These statements are neither promises or guarantees and involve risks and uncertainties that could cause actual results to differ materially from those stated or implied by the forward-looking statements, including, without limitation, risks relating to the Company’s ability to implement and make appropriate, timely and beneficial decisions as to when, how and if to purchase shares under the repurchase program; and other risks described in the Company’s filings with the SEC. While forward-looking statements sometimes are presented with numerical specificity, they are based on various assumptions made by management regarding future circumstances over many of which the Company has little or no control. Forward-looking statements may be identified by words including “anticipate,” “believe,” “estimate,” “expect,” and similar expressions. The Company cautions readers that forward-looking statements, including, without limitation, those relating to future business prospects, revenues, working capital, liquidity, and income, are subject to certain risks and uncertainties that would cause actual results to differ materially from those indicated in the forward-looking statements. Factors that could cause actual results to differ from forward-looking statements include but are not limited to: (i) competition in the automotive aftermarket; (ii) unfavorable economic conditions; (iii) the loss or decrease in sales among one of our top customers; (iv) customer consolidation in

the automotive aftermarket leading to less favorable customer contract terms; (v) the cancellation or rescheduling of orders; (vi) foreign currency fluctuations and our dependence on foreign suppliers; (vii) extended credit to customers who may be unable to pay; (viii) the loss of a key vendor; (ix) limited customer shelf space; (x) reliance on new product development; (xi) patent filings made by original equipment manufacturers continuing to increase; (xii) quality problems with product after their production and sale to customers; (xiii) loss of third party transportation providers on whom we depend; (xiv) improperly executed, or unrealized cost savings from, our on-going information technology initiatives; (xv) unfavorable results of legal proceedings; (xvi) dependence on senior management and control by officers, directors, and family members; (xvii) operations may be subject to quarter fluctuations and disruptions from events beyond our control. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. For additional information concerning factors that could cause actual results to differ materially from the information contained in this report, reference is made to the information in Part I, “Item 1A Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 28, 2013. You should not place undue reliance on forward-looking statements. Such statements speak only as to the date on which they are made, and we undertake no obligation to update publicly or revise any forward-looking statement, regardless of future developments or availability of new information.

Item 9.01 Financial Statements and Exhibits.

Exhibit Number	Description
99.1	Press Release dated October 28, 2014

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	DORMAN PRODUCTS, INC.
Date: October 28, 2014	By:	/s/ Matthew Kohnke
		Name:	Matthew Kohnke
		Title:	Chief Financial Officer

Exhibit Index

Exhibit Number	Description
99.1	Press Release dated October 28, 2014

EX-99.1

Exhibit 99.1

NEWS RELEASE

Contact: Matthew Kohnke, CFO, mkohnke@dormanproducts.com, (215) 997-1800. Visit our website at www.dormanproducts.com

Dorman Products, Inc. Reports Sales and Earnings

For the Third Quarter Ended September 27, 2014; Announces

Expansion and Extension of Stock Repurchase Program

Third Quarter Highlights:

• Sales increased 11% to $197.8 million.

• EPS increased 10% to $0.68 per diluted share.

• Cash flow from operations increased to $28.2 million from $15.5 million.

• Share repurchases totaled $30.7 million under stock repurchase program.

COLMAR, PENNSYLVANIA (October 28, 2014) – Dorman Products, Inc. (NASDAQ:DORM) today announced sales for the third quarter ended September 27, 2014 of $197.8 million, an increase of 11% from $178.0 million in the third quarter of 2013. Revenue growth was driven by the combination of continued strong overall demand for our products and customer stock-up orders in anticipation of our quarter-end conversion to a new ERP system. Net income for the third quarter ended September 27, 2014 increased 7% to $24.5 million up from the prior year’s net income of $22.9 million. Diluted earnings per share in 2014 increased 10% to $0.68 per share from $0.62 per share in the same period last year.

“Third quarter sales growth represents the seventh consecutive quarter of double digit sales growth, and was consistent with our expectations. Sales growth in the third quarter excluding the customer stock-up orders would have been 5%, which is below recent levels. The lower sales growth is the result of softer order patterns from several customers that appear to be working down inventories, as sell-through of our products by our customers continues to be strong,” said Mr. Steven Berman, Chairman and Chief Executive Officer. “Sales growth was 17% for the first nine months of 2014, driven by continued strong demand for our new products. We remain committed to our strategy of expanding the aftermarket through new product introduction, and believe that we have the product pipeline necessary to meet our future expectations for growth.”

Gross profit margin was 38.4% for the third quarter ended September 27, 2014, compared to 39.2% for the same period last year. The decline in margin was primarily the result of competitive pricing pressures and mix shift that resulted in lower overall net selling prices. Selling, general and administrative expenses increased 10% in 2014 to $37.4 million from $34.0 million in 2013, but declined as a percentage of sales to 18.9% from 19.2%. Cost increases were primarily the result of higher variable costs associated with the 11% sales growth and increased investments in new product development initiatives.

For the nine months ended September 27, 2014, sales increased 17% over the prior year period to $577.5 million from $494.7 million last year. Net income in 2014 increased 16% to $71.3 million from $61.3 million in the same period last year. Diluted earnings per share in 2014 rose 17% to $1.96 from $1.67 in the same period last year.

“We continue to make investments in the business to achieve our long-term goals. In September, we replaced our ERP software system. While the conversion was not without its challenges, we are happy to report that the conversion resulted in minimal disruption to our customers and the business in general. We expect to spend the next six to twelve months completing the stabilization and transition phase of the conversion after which we believe we will begin to generate benefits in the form of improved customer service and operating efficiencies. The fourth quarter will bear additional costs as a result of post-conversion support activities. These costs are expected to be approximately $2.6 million, exclusive of $0.5 million in incremental depreciation expense in the fourth quarter.” said Mr. Berman.

The Company also announced that its Board of Directors has approved an expansion and extension to the on-going share repurchase program. Under the expansion, the Board of Directors has authorized an increase to the share repurchase program from $50 million to $100 million. In connection with the expansion, the Board of Directors has extended the expiration date of the share repurchase program from May 31, 2015 to December 31, 2015. During the third quarter ended September 27, 2014, Dorman repurchased 671,200 shares of its common stock for $30.7 million, at an average price of $45.80 per share. During the first nine months of 2014, the Company has repurchased 833,100 shares of its common stock for $39.3 million, at an average price of $47.15 per share.

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®, TECHoice™, Dorman® Hybrid Drive Batteries and Dorman HD Solutions™ brand names.

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements related to the Company’s future growth rates. 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 28, 2013. 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 data)

	13 Weeks				13 Weeks
Third Quarter (unaudited)	9/27/14		Pct.		9/28/13		Pct.
Net sales	$	197,796		100.0	$	177,953		100.0
Cost of goods sold		121,915		61.6		108,249		60.8
Gross profit		75,881		38.4		69,704		39.2
Selling, general and administrative expenses		37,405		18.9		34,034		19.2
Income from operations		38,476		19.5		35,670		20.0
Interest expense, net		58		0.1		47		—
Income before income taxes		38,418		19.4		35,623		20.0
Provision for income taxes		13,882		7.0		12,736		7.1
Net income	$	24,536		12.4	$	22,887		12.9
Diluted earnings per share	$	0.68			$	0.62
Weighted average diluted shares outstanding		36,024				36,632

DORMAN PRODUCTS, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

(in thousands, except per-share data)

	39 Weeks				39 Weeks
Third Quarter (unaudited)	9/27/14		Pct.		9/28/13		Pct.
Net sales	$	577,495		100.0	$	494,657		100.0
Cost of goods sold		357,011		61.8		299,774		60.6
Gross profit		220,484		38.2		194,883		39.4
Selling, general and administrative expenses		108,361		18.8		98,551		19.9
Income from operations		112,123		19.4		96,332		19.5
Interest expense, net		160		—		148		0.1
Income before income taxes		111,963		19.4		96,184		19.4
Provision for income taxes		40,632		7.0		34,883		7.0
Net income	$	71,331		12.4	$	61,301		12.4
Diluted earnings per share	$	1.96		—	$	1.67		—
Weighted average diluted shares outstanding		36,372		—		36,610		—

DORMAN PRODUCTS, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Unaudited)

(in thousands)

	9/27/14		12/28/13
Assets:
Cash and cash equivalents	$	44,210	$	60,593
Accounts receivable		189,220		180,777
Inventories		180,155		164,421
Deferred income taxes		21,258		20,798
Prepaid expenses		3,422		5,851
Total current assets		438,265		432,440
Property & equipment		80,972		64,786
Goodwill and other intangible assets		30,014		30,089
Other assets		2,935		1,854
Total assets	$	552,186	$	529,169
Liabilities & Shareholders’ Equity:
Accounts payable	$	53,955	$	61,255
Accrued expenses and other		28,346		30,483
Total current liabilities		82,301		91,738
Other long-term liabilities		5,694		5,310
Deferred income taxes		18,506		18,480
Shareholders’ equity		445,685		413,641
Total Liabilities and Equity	$	552,186	$	529,169

Selected Cash Flow Information:

(in thousands)	13 Weeks (unaudited)				39 Weeks (unaudited)
	9/27/14		9/28/13		9/27/14		9/28/13
Depreciation, amortization and accretion	$	3,165	$	2,684	$	9,001	$	7,417
Capital expenditures	$	7,114	$	5,863	$	22,992	$	12,949