EX-99.1 2 d426522dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

NEWS RELEASE

 

LOGO

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 Second Quarter

Ended July 1, 2017

 

    Q2 Sales increased 9.4% to $229.3 million

 

    Q2 EPS increased 10.7% to $0.83 per diluted share

 

    Year to Date Sales increased 7.9% to $450.9 million

 

    Year to Date EPS increased 15.1% to $1.68 per diluted share

COLMAR, PENNSYLVANIA (August 1, 2017) – Dorman Products, Inc. (NASDAQ:DORM), a leading supplier in the automotive aftermarket, today announced sales and EPS for the second quarter.

2nd Quarter Financial Results

Net Sales for the second quarter ended July 1, 2017 increased $19.7 million, or 9.4%, to $229.3 million from $209.6 million for the second quarter ended 2016. Diluted Earnings Per Share for the second quarter increased 10.7% to $0.83 per share from $0.75 per share in the second quarter of 2016.

“The team delivered very solid results in the second quarter. Despite an overall challenging automotive aftermarket demand environment, our top line sales growth remained robust, driven by the continued growth of new products. Some key highlights in the Quarter were:

 

    We launched 1,011 Unique SKU’s in the second quarter, a 16% increase over last year

 

    Dorman HD Solutions sales grew 26% over the second quarter of 2016

 

    Complex Electronics lines grew 17% over the second quarter of 2016

In the quarter, we also started to realize meaningful revenue from the launch of our Dorman Premium full line chassis program. We are truly excited to see the results of a lot of hard work by the team as we strive to become a market leader in this category. Overall, we continue to execute well, and although we are very pleased with our first half growth, we remain cautious entering the back half of the year given current market conditions. However, our previously issued full year guidance for top and bottom line growth remains unchanged” said Matt Barton, President and Chief Executive Officer.

Gross Profit for the second quarter increased 10.6% to $90.9 million (or 39.6% of Net Sales) from $82.2 million (or 39.2% of Net Sales) in the second quarter of 2016. Product mix (higher sales concentration of higher margin products) was the main driver of the year over year Gross Margin percentage improvement. Selling, General and Administrative Expenses for the second quarter increased 11.4% to $45.9 million (or 20.0% of sales) from $41.2 million (or 19.6% of sales) in the second quarter of 2016. Continued 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 was $3.8 million in the quarter compared to $12.6 million in the same quarter last year. Investment in inventories (of approximately $29 million in the quarter), to ensure high customer fill rates, was the driver of the decreased Operating Cash Flows. We expect inventory to plateau in the third quarter and begin to decline slightly in the second half of the year.

Under its share repurchase program, Dorman repurchased 300.6 thousand shares of its common stock for $24.0 million at an average share price of $79.73 during the second quarter ended July 1, 2017, bringing year to date purchases to 439.5 shares at an average price of $79.64.

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  

Second Quarter (unaudited)

     7/1/17        Pct.        6/25/16       Pct.  

Net sales

   $ 229,262        100.0      $ 209,573       100.0  

Cost of goods sold

     138,410        60.4        127,409       60.8  

Gross profit

     90,852        39.6        82,164       39.2  

Selling, general and administrative expenses

     45,853        20.0        41,175       19.6  

Income from operations

     44,999        19.6        40,989       19.6  

Interest income (expense), net

     241        0.1        (62     (0.1

Income before income taxes

     45,240        19.7        40,927       19.5  

Provision for income taxes

     16,803        7.3        14,945       7.1  

Net income

   $ 28,437        12.4      $ 25,982       12.4  

Diluted earnings per share

   $ 0.83         $ 0.75    

Weighted average diluted shares outstanding

     34,225           34,626    


DORMAN PRODUCTS, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

(in thousands, except per-share amounts)

 

     26 Weeks      26 Weeks  

Second Quarter (unaudited)

     7/1/17        Pct.        6/25/16       Pct.  

Net sales

   $ 450,887        100.0      $ 417,721       100.0  

Cost of goods sold

     271,292        60.2        254,963       61.0  

Gross profit

     179,595        39.8        162,758       39.0  

Selling, general and administrative expenses

     89,554        19.8        82,838       19.9  

Income from operations

     90,041        20.0        79,920       19.1  

Interest income (expense), net

     305        0.0        (119     0.0  

Income before income taxes

     90,346        20.0        79,801       19.1  

Provision for income taxes

     32,722        7.2        29,148       7.0  

Net income

   $ 57,624        12.8      $ 50,653       12.1  

Diluted earnings per share

   $ 1.68         $ 1.46    

Weighted average diluted shares outstanding

     34,350           34,669    


DORMAN PRODUCTS, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Unaudited)

(in thousands)

 

     7/1/17      12/31/16  

Assets:

     

Cash and cash equivalents

   $ 129,208      $ 149,121  

Accounts receivable

     230,414        230,526  

Inventories

     200,383        168,851  

Prepaid expenses

     5,048        3,116  

Total current assets

     565,053        551,614  

Property, plant & equipment, net

     90,216        88,436  

Goodwill and other intangible assets, net

     32,642        29,788  

Deferred income taxes, net

     15,095        12,429  

Other assets

     42,028        29,525  

Total assets

   $ 745,034      $ 711,792  
Liabilities & shareholders’ equity:      

Accounts payable

   $ 90,611      $ 72,629  

Accrued expenses and other

     21,058        31,219  

Total current liabilities

     111,669        103,848  

Other long-term liabilities

     8,724        6,302  

Shareholders’ equity

     624,641        601,642  

Total liabilities and equity

   $ 745,034      $ 711,792  

 

Selected Cash Flow Information:            

(in thousands)

   13 Weeks
(unaudited)
     26 Weeks
(unaudited)
 
     7/1/17      6/25/16      7/1/17      6/25/16  

Depreciation, amortization and accretion

   $ 5,187      $ 4,680      $ 10,192      $ 9,179  

Capital expenditures

   $ 6,314      $ 4,520      $ 11,932      $ 10,118