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): May 2, 2017

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) (Zip Code)

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))

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

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 May 2, 2017, Dorman Products, Inc. (the “Company”) issued a press release announcing its operating results for the first quarter ended April 1, 2017. 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) foreign currency fluctuations and our dependence on foreign suppliers; (vi) extended credit to customers who may be unable to pay; (vii) the loss of a key vendor; (viii) limited customer shelf space; (ix) reliance on new product development; (x) claims of intellectual property infringement made by original equipment manufacturers; (xi) quality problems with product after their production and sale to customers; (xii) loss of third party transportation providers on whom we depend; (xiii) unfavorable results of legal proceedings; (xiv) no history of paying regular dividends and no intent to do so; (xv) our executive chairman and his family own a significant portion of the company; (xvi) operations may be subject to quarter fluctuations and disruptions from events beyond our control; (xvii) regulations related to conflict minerals could adversely impact our business; (xviii) cyber-attacks could adversely impact our business; (xix) imposition of new taxes or duties could adversely affect our business; and (xx) exposure to risks related to accounts receivable. 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 31, 2016. 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 May 2, 2017

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: May 2, 2017	By:	/s/ Kevin M. Olsen
	Name:	Kevin M. Olsen
	Title:	Chief Financial Officer

Exhibit Index

Exhibit Number	Description
99.1	Press Release dated May 2, 2017

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 First Quarter

Ended April 1, 2017

• Q1 Sales increased 6.5% to $221.6 million

• Q1 EPS increased 19.7% to $0.85 per diluted share

• Q1 Operating Cash Flow increased 59.5% to $38.1 million

COLMAR, PENNSYLVANIA (May 2, 2017) – Dorman Products, Inc. (NASDAQ:DORM), a leading supplier in the automotive aftermarket, today announced record first quarter sales and EPS.

1st Quarter Financial Results

Net Sales for the first quarter ended April 1, 2017 increased $13.5 million, or 6.5%, to $221.6 million from $208.1 million for the first quarter ended 2016. Diluted Earnings Per Share for the first quarter increased 19.7% to $0.85 per share from $0.71 per share in the first quarter of 2016.

“We are pleased with our first quarter results and I want to thank all of our contributors who enabled us to deliver another very good quarter. Sales growth met our expectations and sound execution enabled us to deliver substantial bottom line leverage on the sales growth. Our New Product engine remains strong and we remain confident in our ability to deliver solid organic growth this year. In the quarter, we launched 1,290 new unique SKU’s, a 17% increase over the first quarter of 2016. In addition, while our Dorman HD Solutions offering is still a relatively small part of the overall business, we remain pleased with our progress, with sales growing 24% year over year. We continue to invest in our Complex Electronics capabilities, with sales in these lines up 20% year over year. Our outlook for the business remains positive. As a result, our previously issued full year 2017 revenue guidance remains in the mid to high single digit growth range while net income growth is expected to be in the high single to low double digit range” said Matt Barton, President and Chief Executive Officer.

Gross Profit for the first quarter increased 10.1% to $88.7 million (or 40.0% of sales) from $80.6 million (or 38.7% of sales) in the first quarter of 2016. Gross Profit Margin, on a sequential basis, remained essentially unchanged. Selling, General and Administrative Expenses for the first quarter increased 4.9% to $43.7 million (or 19.7% of sales) from $41.7 million (or 20.0% of sales) in the first quarter of 2016. Investment in new product development, variable expenses tied to growth and general wage and benefit inflation drove the year over year increases. Operating Cash Flow increased 59.5% to $38.1 million compared to $23.9 million in the same quarter last year, primarily due to higher net income and improvements in working capital in the 2017 period.

Included in the results is a $0.02 diluted earnings per share benefit from the adoption of a new accounting standard. The new standard changes the accounting treatment for income taxes related to stock based employee compensation. The amount of benefit, if any, in future quarters will vary.

Under its share repurchase program, Dorman repurchased 138.9 thousand shares of its common stock for $11.0 million at an average share price of $79.43 during the first quarter ended April 1, 2017.

Dorman Products, Inc. is a leading supplier of Dealer “Exclusive” replacement parts to the Automotive, Medium and Heavy Duty Aftermarkets. 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, , imposition of new taxes or duties, 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 31, 2016. 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
First Quarter (unaudited)	4/1/17		Pct.		3/26/16			Pct.
Net sales	$	221,625		100.0	$	208,148			100.0
Cost of goods sold		132,882		60.0		127,554			61.3
Gross profit		88,743		40.0		80,594			38.7
Selling, general and administrative expenses		43,701		19.7		41,663			20.0
Income from operations		45,042		20.3		38,931			18.7
Interest income (expense), net		64		0.1		(57	)		0.0
Income before income taxes		45,106		20.4		38,874			18.7
Provision for income taxes		15,919		7.2		14,203			6.8
Net income	$	29,187		13.2	$	24,671			11.9
Diluted earnings per share	$	0.85			$	0.71
Weighted average diluted shares outstanding		34,479				34,734

DORMAN PRODUCTS, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Unaudited)

(in thousands)

	4/1/17		12/31/16
Assets:
Cash and cash equivalents	$	156,344	$	149,121
Accounts receivable		232,924		230,526
Inventories		171,762		168,851
Prepaid expenses		2,972		3,116
Total current assets		564,002		551,614
Property, plant & equipment, net		88,836		88,436
Goodwill and other intangible assets, net		32,432		29,788
Deferred income taxes, net		13,615		12,429
Other assets		39,716		29,525
Total assets	$	738,601	$	711,792
Liabilities & shareholders’ equity:
Accounts payable	$	71,653	$	72,629
Accrued expenses and other		38,796		31,219
Total current liabilities		110,449		103,848
Other long-term liabilities		8,173		6,302
Shareholders’ equity		619,979		601,642
Total liabilities and equity	$	738,601	$	711,792

Selected Cash Flow Information (unaudited):

(in thousands)	13 Weeks		13 Weeks
	4/1/17		3/26/16
Depreciation, amortization and accretion	$	5,005	$	4,499
Capital expenditures	$	5,618	$	5,598