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 24, 2016

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 24, 2016, Dorman Products, Inc. (the “Company”) issued a press release announcing its operating results for the third quarter ended September 24, 2016. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated by reference herein.

Certain statements in this document constitute “forward-looking statements” within the meaning of the Federal Private Securities Litigation Reform Act of 1995. 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) claims of intellectual property infringement made by original equipment manufacturers; (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 26, 2015. 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 24, 2016

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 24, 2016	By:	/s/    Kevin Olsen
		Name: Kevin Olsen
		Title: Chief Financial Officer

Exhibit Index

Exhibit Number	Description
99.1	Press Release dated October 24, 2016

EX-99.1

Exhibit 99.1

NEWS RELEASE

Contact: Kevin Olsen, CFO, kolsen@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 24, 2016

• Q3 sales increased 1% to $212.8 million

• Q3 EPS increased 5% to $0.77 per diluted share

• Year to date 2016 sales and EPS increase of 5% and 13%, respectively.

COLMAR, PENNSYLVANIA (October 24, 2016) – Dorman Products, Inc. (NASDAQ:DORM) today announced sales for the third quarter ended September 24, 2016 of $212.8 million, an increase of 1% from $210.9 million in the third quarter of 2015. Diluted earnings per share for the third quarter ended September 24, 2016 increased 5% to $0.77 per share from $0.73 per share in the third quarter of 2015.

“Customer sell through rates stabilized in the quarter and were basically at the same rates that we saw in the second quarter. Our third quarter 2015 results included a significant benefit from stocking orders from a major customer, and as result, our 2016 third quarter sales growth was just 1%. We expect the unfavorable impact of the strong stocking order comparisons in the third quarter to reverse in the fourth quarter. We continue to expect full year 2016 sales growth to be in the 6% to 7% range and we also expect reported 2016 EPS growth to be in the mid-teens range,” said Matt Barton, President and Chief Executive Officer.

Gross profit margin for the third quarter of 2016 was 39.1% compared to 38.3% in the third quarter of 2015 primarily due to favorable mix and a reduced excess and obsolete provision as inventory reduction initiatives have continued to gain traction. SG&A expenses increased 5% in the third quarter of 2016 to $41.5 million from $39.6 million in the third quarter of 2015.

For the nine months ended September 24, 2016, sales increased 5% over the prior year to $630.5 million from $598.1 million last year. Diluted earnings per share in 2016 rose 13% to $2.23 from $1.98 in the prior year. Operating cash flow for the nine months ended September 24, 2016 was $55.5 million compared to $57.5 million in the first nine months of 2015.

“We continue to be very optimistic about our future growth potential. During the quarter, we introduced 977 new product SKUs and we were also awarded significant new Chassis business from a major customer which will begin shipping late in the fourth quarter of 2016. As we look forward to 2017, we expect to deliver organic revenue and net income growth in the mid to high single digit range,” continued Mr. Barton. “We are continuing to invest in our new product development capabilities that will provide additional growth opportunities for both Dorman and our customers.”

The Company did not repurchase any of its common stock in the quarter and has $57.8 million remaining under its current $150 million share repurchase program.

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 26, 2015. 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)		9/24/16	Pct.		9/26/15	Pct.
Net sales	$	212,786	100.0	$	210,928	100.0
Cost of goods sold		129,641	60.9		130,134	61.7
Gross profit		83,145	39.1		80,794	38.3
Selling, general and administrative expenses		41,512	19.5		39,554	18.7
Income from operations		41,633	19.6		41,240	19.6
Interest expense, net		61	0.1		48	0.1
Income before income taxes		41,572	19.5		41,192	19.5
Provision for income taxes		14,877	7.0		15,132	7.1
Net income	$	26,695	12.5	$	26,060	12.4
Diluted earnings per share		$ 0.77			$ 0.73
Weighted average diluted shares outstanding		34,672			35,575

DORMAN PRODUCTS, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

(in thousands, except per-share amounts)

	39 Weeks			39 Weeks
Third Quarter (unaudited)		9/24/16	Pct.		9/26/15	Pct.
Net sales	$	630,507	100.0	$	598,123	100.0
Cost of goods sold		384,604	61.0		367,866	61.5
Gross profit		245,903	39.0		230,257	38.5
Selling, general and administrative expenses		124,350	19.7		118,470	19.8
Income from operations		121,553	19.3		111,787	18.7
Interest expense, net		180	0.0		152	0.0
Income before income taxes		121,373	19.3		111,635	18.7
Provision for income taxes		44,025	7.0		41,093	6.9
Net income	$	77,348	12.3	$	70,542	11.8
Diluted earnings per share		$ 2.23			$ 1.98
Weighted average diluted shares outstanding		34,626			35,611

DORMAN PRODUCTS, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Unaudited)

(in thousands)

		9/24/16		12/26/15
Assets:
Cash and cash equivalents	$	95,142	$	78,659
Accounts receivable		245,006		203,923
Inventories		168,245		193,725
Prepaids and other current assets		4,259		2,326
Total current assets		512,652		478,633
Property, plant & equipment, net		88,384		87,046
Goodwill and other intangible assets, net		29,814		29,889
Deferred income taxes, net		7,581		7,557
Other assets		29,574		18,740
Total assets	$	668,005	$	621,865
Liabilities & shareholders’ equity:
Accounts payable	$	52,481	$	63,967
Accrued expenses and other		30,824		34,603
Total current liabilities		83,305		98,570
Other long-term liabilities		5,536		5,259
Shareholders’ equity		579,164		518,036
Total liabilities and equity	$	668,005	$	621,865

Selected Cash Flow Information:
(in thousands)	13 Weeks (unaudited)				39 Weeks (unaudited)
		9/24/16		9/26/15		9/24/16		9/26/15
Depreciation, amortization and accretion	$	4,711	$	4,143	$	13,890	$	11,739
Capital expenditures	$	4,772	$	5,518	$	14,890	$	16,534