10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_____________________

FORM 10-Q

_____________________

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 1, 2023

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 0-18914

_____________________

Dorman Products, Inc.

(Exact name of registrant as specified in its charter)

_____________________

Pennsylvania	23-2078856
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
3400 East Walnut Street, Colmar, Pennsylvania	18915
(Address of principal executive offices)	(Zip Code)

(215) 997-1800

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.01 per share	DORM	NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes o No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). x Yes o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	x	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	o
		Emerging growth company	o

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. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). o Yes x No

As of April 27, 2023, the registrant had 31,468,334 shares of common stock, par value $0.01 per share, outstanding.

DORMAN PRODUCTS, INC.

INDEX TO QUARTERLY REPORT ON FORM 10-Q

April 1, 2023

		Page
PART I — FINANCIAL INFORMATION
ITEM 1.	Financial Statements (unaudited)
	Condensed Consolidated Statements of Operations and Comprehensive Income	3
	Condensed Consolidated Balance Sheets	4
	Condensed Consolidated Statements of Shareholders’ Equity	5
	Condensed Consolidated Statements of Cash Flows	6
	Notes to Condensed Consolidated Financial Statements	7
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	22
ITEM 4.	Controls and Procedures	22
PART II — OTHER INFORMATION
ITEM 1.	Legal Proceedings	24
ITEM 1A.	Risk Factors	24
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	24
ITEM 3.	Defaults Upon Senior Securities	25
ITEM 4.	Mine Safety Disclosures	25
ITEM 5.	Other Information	25
ITEM 6.	Exhibits	25
Exhibit Index		25
Signatures		26

2

PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements

DORMAN PRODUCTS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME

(UNAUDITED)

	Three Months Ended
(in thousands, except per share data)	April 1, 2023		March 26, 2022
Net sales	$	466,738	$	401,579
Cost of goods sold	322,261		268,339
Gross profit	144,477		133,240
Selling, general and administrative expenses	126,363		86,528
Income from operations	18,114		46,712
Interest expense, net	11,953		1,231
Other income, net	(357)		(84)
Income before income taxes	6,518		45,565
Provision for income taxes	835		10,358
Net income	$	5,683	$	35,207
Other comprehensive income:
Change in foreign currency translation adjustment	$	119	$	1,696
Comprehensive Income	$	5,802	$	36,903
Earnings per share:
Basic	$	0.18	$	1.12
Diluted	$	0.18	$	1.11
Weighted average shares outstanding:
Basic	31,436		31,499
Diluted	31,537		31,601

See accompanying Notes to Condensed Consolidated Financial Statements

3

DORMAN PRODUCTS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(in thousands, except for share data)	April 1, 2023		December 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	33,307	$	46,034
Accounts receivable, less allowance for doubtful accounts of $1,398 and $1,363	429,308		427,385
Inventories	686,949		755,901
Prepaids and other current assets	40,173		39,800
Total current assets	1,189,737		1,269,120
Property, plant and equipment, net	151,541		148,477
Operating lease right-of-use assets	108,549		109,977
Goodwill	443,336		443,035
Intangible assets, net	316,999		322,409
Other assets	50,497		48,768
Total assets	$	2,260,659	$	2,341,786
Liabilities and shareholders’ equity
Current liabilities:
Accounts payable	$	145,686	$	179,819
Accrued compensation	14,606		19,490
Accrued customer rebates and returns	170,432		192,116
Revolving credit facility	215,460		239,363
Current portion of long-term debt	12,500		12,500
Other accrued liabilities	48,239		35,007
Total current liabilities	606,923		678,295
Long-term debt	479,439		482,464
Long-term operating lease liabilities	96,571		98,221
Other long-term liabilities	16,749		28,349
Deferred tax liabilities, net	11,833		11,826
Commitments and contingencies (Note 8)
Shareholders’ equity:
Common stock, $0.01 par value; 50,000,000 shares authorized; 31,469,310 and 31,430,632 shares issued and outstanding in 2023 and 2022, respectively	315		314
Additional paid-in capital	90,416		88,750
Retained earnings	961,597		956,870
Accumulated other comprehensive loss	(3,184)		(3,303)
Total shareholders’ equity	1,049,144		1,042,631
Total liabilities and shareholders' equity	$	2,260,659	$	2,341,786

See accompanying Notes to Condensed Consolidated Financial Statements

4

DORMAN PRODUCTS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(UNAUDITED)

	Three Months Ended April 1, 2023
	Common Stock			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total
(in thousands, except share data)	Shares Issued	Par Value
Balance at December 31, 2022	31,430,632	$	314	$	88,750	$	956,870	$	(3,303)	$	1,042,631
Exercise of stock options	15,630	—		1,049		—		—		1,049
Compensation expense under Incentive Stock Plan	—	—		2,312		—		—		2,312
Purchase and cancellation of common stock	(5,125)	—		(9)		(424)		—		(433)
Issuance of non-vested stock, net of cancellations	52,151	1		(1)		—		—		—
Other stock-related activity, net of tax	(23,978)	—		(1,685)		(532)		—		(2,217)
Other comprehensive income	—	—		—		—		119		119
Net income	—	—		—		5,683		—		5,683
Balance at April 1, 2023	31,469,310	$	315	$	90,416	$	961,597	$	(3,184)	$	1,049,144
	Three Months Ended March 26, 2022
	Common Stock			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total
(in thousands, except share data)	Shares Issued	Par Value
Balance at December 25, 2021	31,607,509	$	316	$	77,451	$	856,409	$	(1,440)	$	932,736
Exercise of stock options	2,478	—		—		—		—		—
Compensation expense under Incentive Stock Plan	—	—		2,152		—		—		2,152
Purchase and cancellation of common stock	(111,114)	(1)		(200)		(10,716)		—		(10,917)
Cancellation of non-vested stock, net of issuances	(2,511)	—		377		—		—		377
Other stock-related activity, net of tax	(16,446)	—		(874)		(977)		—		(1,851)
Other comprehensive income	—	—		—		—		1,696		1,696
Net income	—	—		—		35,207		—		35,207
Balance at March 26, 2022	31,479,916	$	315	$	78,906	$	879,923	$	256	$	959,400

See accompanying Notes to Condensed Consolidated Financial Statements

5

DORMAN PRODUCTS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Three Months Ended
(in thousands)	April 1, 2023		March 26, 2022
Cash Flows from Operating Activities:
Net income	$	5,683	$	35,207
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation, amortization and accretion	13,540		9,743
Provision for doubtful accounts	2,744		29
Provision for stock-based compensation	2,334		2,152
Changes in assets and liabilities:
Accounts receivable	(4,673)		16,727
Inventories	68,935		(33,034)
Prepaids and other current assets	(591)		(853)
Other assets	(2,130)		(1,976)
Accounts payable	(34,258)		(12,392)
Accrued customer rebates and returns	(21,683)		7,202
Accrued compensation and other liabilities	(3,691)		409
Cash provided by operating activities	26,210		23,214
Cash Flows from Investing Activities:
Acquisition, net of cash acquired	267		595
Property, plant and equipment additions	(10,537)		(7,247)
Cash used in investing activities	(10,270)		(6,652)
Cash Flows from Financing Activities:
Payments of revolving credit line	(23,900)		(10,000)
Payments of long-term debt	(3,125)		—
Proceeds from exercise of stock options	1,049		—
Purchase and cancellation of common stock	(433)		(10,752)
Other stock-related activity	(2,254)		(1,211)
Cash used in financing activities	(28,663)		(21,963)
Effect of exchange rate changes on Cash and Cash Equivalents	(4)		46
Net Decrease in Cash and Cash Equivalents	(12,727)		(5,355)
Cash and Cash Equivalents, Beginning of Period	46,034		58,782
Cash and Cash Equivalents, End of Period	$	33,307	$	53,427
Supplemental Cash Flow Information
Cash paid for interest expense	$	11,534	$	999
Cash paid for income taxes	$	1,055	$	712

See accompanying Notes to Condensed Consolidated Financial Statements

6

DORMAN PRODUCTS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED APRIL 1, 2023 AND MARCH 26, 2022

(UNAUDITED)

1.    Basis of Presentation

As used herein, unless the context requires otherwise, “Dorman,” the “Company,” “we,” “us,” or “our” refers to Dorman Products, Inc. and its subsidiaries. Our ticker symbol on the NASDAQ Global Select Market is “DORM.”

The accompanying unaudited condensed consolidated financial statements have been prepared under U.S. generally accepted accounting principles (“GAAP”) for interim financial information and under the rules and regulations of the U.S. Securities and Exchange Commission. However, they do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of only normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three months ended April 1, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2023 or any future period. We may experience significant fluctuations from quarter to quarter in our results of operations due to the timing of orders placed by our customers and the introduction of new products and product lines to customers. These financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

2.    Acquisitions

On October 4, 2022 (the “Closing Date”), Dorman acquired 100% of the issued and outstanding equity interests of Super ATV, LLC ("SuperATV") (the “Transaction”), for aggregate consideration of $509.8 million (net of $6.8 million cash acquired), plus a potential earn-out payment to the sellers of SuperATV not to exceed $100 million in the aggregate, which remains subject to the achievement by SuperATV of certain revenue and gross margin targets in the years ending December 31, 2023 and December 31, 2024. In the three months ended April 1, 2023, we received $0.3 million in cash as proceeds from the closing net working capital adjustments. SuperATV is a leading independent supplier to the powersports aftermarket with a family of highly respected brands spanning functional accessories and upgrades, as well as replacement parts for specialty vehicles.

The Transaction was accounted for as a business combination under the acquisition method of accounting. We have allocated the purchase price to tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values. The allocation of the purchase price to the assets acquired and liabilities assumed, including the residual amount allocated to goodwill, as of December 31, 2022, is based upon preliminary information and is subject to change within the permitted measurement period (up to one year from the acquisition date) as additional information concerning final asset and liability valuations is obtained. The fair values that remain preliminary include tax-related liabilities and contingent liabilities. Any material adjustments to the estimates based upon new information identified during the measurement period will be reflected as of the date of the acquisition.

7

The table below details the fair values of the assets acquired and the liabilities assumed at the acquisition date, including applicable measurement period adjustments:

(in thousands)
Accounts receivable	$	3,317
Inventories	90,428
Prepaids and other current assets	5,293
Property, plant and equipment	23,776
Goodwill	247,474
Identifiable intangible assets	157,500
Operating lease right-of-use assets	11,661
Other Assets	3,001
Accounts payable	(7,436)
Accrued compensation	(2,086)
Accrued customer rebates and returns	(1,609)
Other current liabilities	(8,726)
Long-term operating lease liabilities	(9,508)
Other long-term liabilities	(3,307)
Net cash consideration	$	509,778

The financial results of the Transaction have been included in the consolidated financial statements since the date of acquisition.

3.    Sales of Accounts Receivable

We have entered several customer-sponsored programs administered by unrelated financial institutions that permit us to sell (factor) certain accounts receivable at discounted rates to the financial institutions. Transactions under these agreements were accounted for as sales of accounts receivable and the related accounts receivable were removed from our Condensed Consolidated Balance Sheets at the times of the sales transactions. Under these agreements, we sold $237.7 million and $275.2 million of accounts receivable during the three months ended April 1, 2023 and March 26, 2022, respectively. Selling, general and administrative expenses include factoring costs associated with these accounts receivable sales programs of $13.5 million and $4.9 million during the three months ended April 1, 2023 and March 26, 2022, respectively. The increase in factoring costs for the three months ended April 1, 2023 compared to the prior year period was driven by higher interest rates during the three months ended April 1, 2023.

4.    Inventories

Inventories include the cost of material, freight, direct labor and overhead utilized in the processing of our products and are stated at the lower of cost or net realizable value. Inventories were as follows:

(in thousands)	April 1, 2023		December 31, 2022
Raw materials	$	30,839	$	34,267
Bulk product	200,491		234,871
Finished product	446,544		478,032
Packaging materials	9,075		8,731
Total	$	686,949	$	755,901

8

5.    Goodwill and Intangible Assets

Goodwill

Goodwill included the following:

(in thousands)
Balance at December 31, 2022	$	443,035
Measurement period adjustments for SuperATV acquisition	233
Foreign currency translation	68
Balance at April 1, 2023	$	443,336

Intangible Assets

Intangible assets included the following:

	April 1, 2023						December 31, 2022
Intangible assets subject to amortization	Gross Carrying Value		Accumulated Amortization		Net Carrying Value		Gross Carrying Value		Accumulated Amortization		Net Carrying Value
(in thousands)
Customer relationships	$	175,430	$	24,156	$	151,274	$	175,430	$	21,643	$	153,787
Trade names	67,690		7,469		60,221		67,690		6,370		61,320
Product Portfolio	107,800		4,644		103,156		107,800		2,953		104,847
Technology	2,167		882		1,285		2,167		820		1,347
Patents and Other	1,430		367		1,063		1,430		322		1,108
Total	$	354,517	$	37,518	$	316,999	$	354,517	$	32,108	$	322,409

Amortization expense was $5.5 million and $3.0 million during the three months ended April 1, 2023 and March 26, 2022, respectively.

6.    Debt

As of April 1, 2023 and December 31, 2022, the weighted average interest rate on the outstanding borrowings under our credit facility was 6.41% and 5.78%, respectively.

7.    Commitments and Contingencies

Acquisitions

We have contingent consideration related to an acquisition due to the uncertainty of the ultimate amount of any payments that will become due as earnout payments if performance targets are achieved. If the remaining performance targets for the acquisition are fully achieved, the maximum additional contingent payments to be made under the transaction documents would be $100.0 million in aggregate.

As of April 1, 2023, we accrued $20.5 million, representing the fair value of the estimated payments that we expect could become due in connection with the transaction. For the three months ended April 1, 2023, we recorded a charge of $0.5 million of accretion on the estimated payment liability, with the charge included in selling, general and administrative expenses in the Condensed Consolidated Statements of Operations.

Other Contingencies

We are a party to or otherwise involved in legal proceedings that arise in the ordinary course of business, such as various claims and legal actions involving contracts, employment claims, competitive practices, intellectual property infringement, product liability claims and other matters arising out of the conduct of our business. In the opinion of management, none of the actions,

9

individually or in the aggregate, taking into account relevant insurance coverage, would likely have a material financial impact on the Company and we believe the range of reasonably possible losses from current matters, taking into account relevant insurance coverage, is immaterial. However, legal matters are subject to inherent uncertainties and there exists the possibility that the ultimate resolution of any of these matters could have a material adverse impact on the Company’s cash flows, financial position or results of operations in the period in which any such effects are recorded.

8.    Revenue Recognition

The following tables present our disaggregated revenue by type of major good / product line, and geography.

	Three Months Ended
(in thousands)	April 1, 2023		March 26, 2022
Powertrain	$	171,035	$	152,228
Chassis	188,864		160,862
Motor Vehicle body	91,159		73,280
Hardware	15,680		15,209
Total	$	466,738	$	401,579

	Three Months Ended
(in thousands)	April 1, 2023		March 26, 2022
Net sales to U.S. customers	$	430,693	$	373,618
Net sales to non-U.S. customers	36,045		27,961
Total	$	466,738	$	401,579

9.    Stock-Based Compensation

Restricted Stock Awards (“RSAs”) and Restricted Stock Units (“RSUs”)

We issue RSAs and RSUs to participants in our equity plans in the form of time-based RSAs and RSUs and performance-based RSAs and RSUs.

Compensation cost related to RSA and RSU grants was $1.7 million and $1.6 million for the three months ended April 1, 2023 and March 26, 2022, respectively, and was included in selling, general and administrative expenses in the Condensed Consolidated Statements of Operations.

The following table summarizes our RSA and RSU activity for the three months ended April 1, 2023:

	Shares	Weighted Average Fair Value
Balance at December 31, 2022	238,922	$	92.07
Granted	93,944	$	98.02
Vested	(59,382)	$	77.02
Canceled	(8,392)	$	81.56
Balance at April 1, 2023	265,092	$	97.88

For the three months ended April 1, 2023, we granted 29,399 performance-based RSUs with a grant date fair value of $113.15 per share. For the three months ended March 26, 2022, we granted 23,995 performance-based RSUs with a grant date fair value of $111.31 per share.

10

As of April 1, 2023, there was $20.2 million of unrecognized compensation cost related to unvested RSA and RSU grants that is expected to be recognized over a weighted average period of 2.6 years.

Stock Options

We grant stock options to participants in our equity plans. Compensation cost related to stock option grants was $0.4 million for both the three months ended April 1, 2023 and March 26, 2022, and was included as selling, general and administrative expenses in the Condensed Consolidated Statements of Operations.

The following table summarizes our stock option activity for the three months ended April 1, 2023:

	Shares	Weighted Average Price		Weighted Average Remaining Term (years)	Aggregate Intrinsic Value  (in thousands)
Balance at December 31, 2022	268,119	$	84.03
Granted	76,784	$	91.28
Canceled	(1,113)	$	96.36
Exercised	(21,702)	$	72.85
Balance at April 1, 2023	322,088	$	86.47	6.1	$	1,935
Exercisable at April 1, 2023	133,913	$	80.31	5.0	$	1,398

As of April 1, 2023, there was $5.7 million of unrecognized compensation cost related to unvested stock options that is expected to be recognized over a weighted average period of 3.2 years.

10.    Earnings Per Share

Basic earnings per share was calculated by dividing our net income by the weighted average number of common shares outstanding during the period, excluding unvested RSAs which are considered to be contingently issuable. To calculate diluted earnings per share, common share equivalents are added to the weighted average number of common shares outstanding. Common share equivalents are calculated using the treasury stock method and are computed based on outstanding stock-based awards.

For the three months ended April 1, 2023 and March 26, 2022, there were approximately 237,000 shares and 27,000 shares, respectively, that were excluded from the calculation of diluted earnings per share because their effect would have been anti-dilutive.

11

The following table sets forth the computation of basic earnings per share and diluted earnings per share:

	Three Months Ended
(in thousands, except per share data)	April 1, 2023		March 26, 2022
Net income	$	5,683	$	35,207
Denominator:
Weighted average basic shares outstanding	31,436		31,499
Effect of stock-based compensation awards	101		102
Weighted average diluted shares outstanding	31,537		31,601
Earnings Per Share:
Basic	$	0.18	$	1.12
Diluted	$	0.18	$	1.11

11.    Common Stock Repurchases

We periodically repurchase, at the then current market price, and cancel common stock issued to the Dorman Products, Inc. 401(k) Retirement Plan and Trust (the “401(k) Plan”). 401(k) Plan participants can no longer purchase shares of Dorman common stock as an investment option under the 401(k) Plan. Shares are generally purchased by the Company from the 401(k) Plan when participants sell units as permitted by the 401(k) Plan or elect to leave the 401(k) Plan upon retirement, termination or other reasons. The following table summarizes the repurchase and cancellation of common stock by the Company for the periods indicated:

	Three Months Ended
	April 1, 2023		March 26, 2022
Shares repurchased and canceled	5,125		12,764
Total cost of shares repurchased and canceled (in thousands)	$	434	$	1,388
Average price per share	$	84.62	$	108.74

Separately, our Board of Directors has authorized the repurchase of up to $600 million of our common stock through December 31, 2024 under a previously announced share repurchase program and subsequent authorizations. Under this program, share repurchases may be made from time to time depending on market conditions, share price, share availability and other factors at our discretion. The share repurchase program does not obligate us to acquire any specific number of shares. At April 1, 2023, $228.0 million was available for repurchase under this share repurchase program. The following table summarizes the repurchase and cancellation of common stock under the share repurchase program:

	Three Months Ended
	April 1, 2023		March 26, 2022
Shares repurchased and canceled	—		98,350
Total cost of shares repurchased and canceled (in thousands)	$	—	$	9,529
Average price per share	$	—	$	96.89

12.    Income Taxes

At April 1, 2023, we had $3.4 million of net unrecognized tax benefits, all of which would lower our effective tax rate if recognized. We recognize interest and penalties related to uncertain tax positions in income tax expense. As of April 1, 2023, accrued interest and penalties related to uncertain tax positions were not material.

12

We file income tax returns in the United States, Canada, China, India, and Mexico. The statute of limitations for tax years before 2019 is closed for U.S. federal income tax purposes. The statute of limitations for tax years before 2018 is closed for the states in which we file. The statute of limitations for tax years before 2019 is closed for income tax purposes in Canada, China, and India. The statute of limitations for tax years before 2017 is closed for income tax purposes in Mexico.

13.    Related-Party Transactions

We lease our Colmar, PA facility and a portion of our Lewisberry, PA facility from entities in which Steven L. Berman, our Non-Executive Chairman, and certain of his family members are owners. Each lease is a non-cancelable operating lease. Total rental payments to those entities under these lease arrangements will be $2.9 million in fiscal 2023 and were $2.5 million in fiscal 2022. The lease for our corporate headquarters in Colmar, PA was renewed in December 2022, effective as of January 1, 2023, and will expire on December 31, 2027. The lease for our Lewisberry, PA operating facility was signed in September 2020 and will expire on December 31, 2027.

We are a partner in a joint venture with one of our suppliers and own a minority interest in two other suppliers. Two of these investments are accounted for under the equity method and one is accounted for under the cost method.

14.    Fair Value Disclosures

The carrying value of financial instruments such as cash and cash equivalents, accounts receivable, accounts payable, and other current assets and liabilities approximate their fair value based on the short-term nature of these instruments. The carrying value of borrowings under our credit facility approximates fair value because borrowings under our credit facility bear interest at rates indexed to a market rate (Term SOFR).

13

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of

Operations

“Management’s Discussion and Analysis of Financial Condition and Results of Operations” should be read in conjunction with the condensed consolidated financial statements and related notes thereto included in PART I, ITEM 1 of this Quarterly Report on Form 10-Q. As used herein, unless the context requires otherwise, “Dorman,” the “Company,” “we,” “us,” or “our” refers to Dorman Products, Inc. and its subsidiaries.

Cautionary Statement Regarding Forward-Looking Statements

Certain statements in this document constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements related to the global coronavirus pandemic, net sales, diluted earnings per share, gross profit, gross margin, selling, general and administrative expenses, income tax expense, income before income taxes, net income, cash and cash equivalents, indebtedness, liquidity, the Company’s share repurchase program, the Company’s outlook, the Company’s growth opportunities and future business prospects, operational costs and productivity initiatives, inflation, customs duties and mitigation of tariffs, long-term value, acquisitions and acquisition opportunities, investments, cost offsets, quarterly fluctuations, new product development, customer concessions, and fluctuations in foreign currency. Words such as “may,” “believe,” “demonstrate,” “expect,” “estimate,” “forecast,” “project,” “plan,” “anticipate,” “intend,” “should,” “will” and “likely” and similar expressions identify forward-looking statements. However, the absence of these words does not mean the statements are not forward-looking. 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 statements were made. Such forward-looking statements are based on current expectations that involve a number of known and unknown risks, uncertainties and other factors (many of which are outside of our control) which may cause actual events to be materially different from those expressed or implied by such forward-looking statements. 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.

Please refer to “Statement Regarding Forward-Looking Statements” and “Item 1A. Risk Factors” located in Part I of our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”), as updated by our subsequent filings with the SEC, for a description of these and other risks and uncertainties that could cause actual results to differ materially from those projected or implied by the forward-looking statements. The Company is under no obligation to, and expressly disclaims any such obligation to, update any of the information in this document, including but not limited to any situation where any forward-looking statement later turns out to be inaccurate whether as a result of new information, future events or otherwise.

Introduction

The following discussion and analysis, as well as other sections in this Quarterly Report on Form 10-Q, should be read in conjunction with the unaudited condensed consolidated financial statements and footnotes thereto of Dorman Products, Inc. included in “ITEM 1. Financial Statements” of this Quarterly Report on Form 10-Q and with Management’s Discussion and Analysis of Financial Condition and Results of Operations and the audited consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

14

This Quarterly Report on Form 10-Q contains the registered and unregistered trademarks or service marks of Dorman and are the property of Dorman Products, Inc. and/or its affiliates. This Quarterly Report on Form 10-Q also may contain additional trade names, trademarks or service marks belonging to other companies. We do not intend our use or display of other parties’ trademarks, trade names or service marks to imply, and such use or display should not be construed to imply, a relationship with or endorsement or sponsorship of us by these parties.

Overview

We are one of the leading suppliers of replacement and upgrade parts in the motor vehicle aftermarket industry, serving passenger cars, light-, medium-, and heavy-duty trucks, as well as specialty vehicles, including utility terrain vehicles (UTVs) and all-terrain vehicles (ATVs). As of December 31, 2022, we marketed approximately 129,000 distinct parts compared to approximately 118,000 as of December 25, 2021, many of which we designed and engineered. This number excludes private label stock-keeping units and other variations in how we market, package and distribute our products, includes distinct parts of acquired companies and reflects distinct parts that have been discontinued at the end of their lifecycle. Our products are sold under our various brand names, under our customers’ private label brands or in bulk. We are one of the leading aftermarket suppliers of parts that were traditionally available to consumers only from original equipment, or OE, manufacturers or salvage yards. These parts include, among other parts, leaf springs, intake manifolds, exhaust manifolds, window regulators, radiator fan assemblies, tire pressure monitor sensors, exhaust gas recirculation (EGR) coolers, UTV windshields, and complex electronics modules.

We generate most of our net sales from customers in North America, primarily in the United States. Our products are sold primarily through aftermarket retailers, including through their online platforms; dealers; national, regional and local warehouse distributors and specialty markets; and salvage yards. We also distribute aftermarket parts outside the United States, with sales primarily into Canada and Mexico, and to a lesser extent, Europe, the Middle East and Australia.

We may experience significant fluctuations from quarter to quarter in our results of operations due to the timing of orders placed by our customers as well as our ability and the ability of our suppliers to deliver products ordered by our customers. The introduction of new products and product lines to customers, as well as business acquisitions, may also cause significant fluctuations from quarter to quarter.

Critical Accounting Policies

There have been no material changes to the Company’s critical accounting policies as described in the Annual Report on Form 10-K for the year ended December 31, 2022.

New Product Development

New product development is an important success factor for us and traditionally has been our primary vehicle for growth. We have made incremental investments to increase our new product development efforts to grow our business and strengthen our relationships with our customers. The investments primarily have been in the form of increased product development resources, increased customer and end-user awareness programs, and customer service improvements. These investments historically have enabled us to provide an expanding array of new product offerings and grow revenues at levels that generally have exceeded market growth rates.

In the three months ended April 1, 2023, we introduced 984 new distinct parts to our customers and end-users, including 360 “New-to-the-Aftermarket” parts. We introduced 4,443 new distinct parts to our customers and end-users in the fiscal year ended December 31, 2022, including 1,565 “New-to-the-Aftermarket” parts.

15

One area of focus has been our complex electronics program, which capitalizes on the growing number of electronic components being utilized on today’s OE platforms. New vehicles contain an average of approximately 50 electronic modules, with some high-end luxury vehicles containing over 100 modules. Our complex electronics products are designed and developed in-house and tested to help ensure consistent performance, and our product portfolio is focused on further developing our leadership position in the category.

Another area of focus has been on products we market for the medium- and heavy-duty truck sector of the motor vehicle aftermarket industry. We believe that this sector provides many of the same growth opportunities that the passenger car and light-duty truck sector of the motor vehicle aftermarket industry has provided us. We specialize in offering parts to this sector that were traditionally only available from OE manufacturers or salvage yards, similar to how we approach the passenger car and light-duty truck sector. During fiscal 2022, we introduced 486 distinct parts in this product line. We expect to continue to invest in the medium- and heavy-duty product category.

Acquisitions

A key component of our strategy is growth through acquisitions. On October 4, 2022, we acquired Super ATV, LLC ("SuperATV"), a leading independent supplier to the powersports aftermarket with a family of highly respected brands spanning functional accessories and upgrades, as well as replacement parts for specialty vehicles. See Note 2, Acquisitions under Notes to Condensed Consolidated Financial Statements for additional information. We may acquire businesses in the future to supplement our financial growth, increase our customer base, add to our distribution capabilities or enhance our product development resources, among other reasons.

Economic Factors

The Company’s financial results are also impacted by various economic and industry factors, including, but not limited to the number, age and condition of vehicles in operation at any one time, and the miles driven by those vehicles.

Vehicles in Operation

The Company’s products are primarily purchased and installed on a subsegment of the passenger and light-duty vehicles in operation in the United States (“VIO”), specifically weighted towards vehicles aged 8 to 13 years old. Each year, the United States seasonally adjusted annual rate (“US SAAR”) of new vehicles purchased adds a new year to the VIO. According to data from the Auto Care Association (“Auto Care”), the US SAAR experienced a decline from 2008 to 2011 as consumers purchased fewer new vehicles as a result of the Great Recession of 2008. We believe that the declining US SAAR during that period resulted in a follow-on decline in our primary VIO subsegment (8 to 13-year-old vehicles) commencing in 2016. However, following 2011 and the impact of the Great Recession of 2008, U.S. consumers began to increase their purchases of new vehicles which over time caused the US SAAR to recover and return to more historical levels. Consequently, we expect the VIO for vehicles aged 8 to 13 years old to continue to recover over the next several years.

In addition, we believe that vehicle owners generally are operating their current vehicles longer than they did several years ago, performing necessary repairs and maintenance to keep those vehicles well maintained. We believe this trend has supported an increase in VIO, which increased to 293.4 million in 2022, a 1% increase over 2021. According to data published by Polk, a division of IHS Automotive, the average age of VIO increased to 12.4 years as of October 2022 from 12.2 years as of October 2021.

16

Miles Driven

The number of miles driven is another important statistic that impacts our business. Generally, as vehicles are driven more miles, the more likely it is that parts will fail and there will be increased demand for replacement parts, including our parts. According to the U.S. Department of Transportation, the number of miles driven through October 2022 increased 1.5% year over year. We expect this increase in miles driven may continue, given that certain employers have begun to lift work-from-home policies implemented during the pandemic and, consequently, consumers may return to commuting to work on a more regular basis. However, global gasoline prices have been volatile in recent months, which may negatively impact miles driven as consumers reduce travel or seek alternative methods of transportation.

Brand Protection

We operate in a highly competitive market. As a result, we are continuously evaluating our approach to brand, pricing and terms to our different customers and channels. For example, we maintain a brand protection policy, which is designed to ensure that certain products bearing the Dorman name are not advertised below certain approved pricing levels. In addition, we may pursue legal remedies when we see third parties violating our intellectual property rights, including those that violate our patents, wrongfully represent our products as their own or use our product images for their own marketing efforts.

Discounts, Allowances and Incentives

We offer a variety of customer discounts, rebates, defective and slow-moving product returns and other incentives. We may offer cash discounts for paying invoices in accordance with the specified discount terms of the invoice. In addition, we may offer pricing discounts based on volume purchased from us or other pricing discounts related to programs under a customer’s agreement. These discounts can be in the form of “off-invoice” discounts and are immediately deducted from sales at the time of sale. For those customers that choose to receive a payment on a quarterly or annual basis instead of “off-invoice,” we accrue for such payments as the related sales are made and reduce sales accordingly. Finally, rebates and discounts are provided to customers to support promotional activities such as advertising and sales force allowances.

Our customers, particularly our larger retail customers, regularly seek more favorable pricing and product return provisions, and extended payment terms when negotiating with us. We attempt to avoid or minimize these concessions as much as possible, but we have granted pricing concessions, indemnification rights and extended customer payment terms, and allowed a higher level of product returns in certain cases. These concessions impact net sales as well as our profit levels and may require additional capital to finance the business. We expect our customers to continue to exert pressure on our margins.

New Customer Acquisition Costs

We may incur customer acquisition costs where we incur change-over costs to induce a customer to switch from a competitor’s brand, including expanding new product lines into our existing customers. Change-over costs include the costs related to removing the new customer’s inventory and replacing it with our inventory, which is commonly referred to as a stock lift. New customer acquisition costs are recorded as a reduction to revenue when incurred.

Product Warranty and Overstock Returns

Many of our products carry a lifetime limited warranty, which generally covers defects in materials or workmanship and failure to meet specifications. In addition to warranty returns, we also

17

may permit our customers to return new, undamaged products to us within customer-specific limits if they have overstocked their inventories. At the time products are sold, we accrue a liability for product warranties and overstock returns as a percentage of sales based upon estimates established using historical information on the nature, frequency and average cost of the claim and the probability of the customer return. Significant judgments and estimates must be made and used in connection with establishing the sales returns and other allowances in any accounting period. Revision to these estimates is made when necessary, based upon changes in these factors. We regularly study trends of such claims.

Foreign Currency

Our products are purchased from suppliers in the United States and a variety of non-U.S. countries. The products generally are purchased through purchase orders with the purchase price specified in U.S. dollars. Accordingly, we generally do not have exposure to fluctuations in the relationship between the U.S. dollar and various foreign currencies between the time of execution of the purchase order and payment for the product.

To the extent that the U.S. dollar changes in value relative to those foreign currencies in the future, the prices charged by our suppliers for products under new purchase orders may change in equivalent U.S. dollars. The largest portion of our overseas purchases comes from China. The Chinese yuan to U.S. dollar exchange rate has fluctuated over the past several years. Any future changes in the value of the Chinese yuan relative to the U.S. dollar may result in a change in the cost of products that we purchase from China. However, the cost of the products we procure is also affected by other factors including raw material availability, labor cost, and transportation costs.

We have subsidiaries located outside the United States with various functional currencies. Because our consolidated financial statements are denominated in U.S. dollars, the assets, liabilities, net sales, and expenses that are denominated in currencies other than the U.S. dollar must be converted into U.S. dollars using exchange rates for the current period. As a result, fluctuations in foreign currency exchange rates may impact our financial results.

Impact of Labor Market and Inflationary Costs

We have experienced broad-based inflationary impacts during the three months ended April 1, 2023 as well as during the year ended December 31, 2022, due primarily to global transportation and logistics constraints, which have resulted in significantly higher transportation costs; tariffs; material costs; and wage inflation from an increasingly competitive labor market. Increased freight, higher labor costs and material inflation costs may continue to negatively impact our results throughout the remainder of fiscal 2023, despite recent signs of global supply chain constraints easing and ocean freight and commodity costs lowering. We attempt to offset inflationary pressures with cost-saving initiatives, price increases to customers and the use of alternative suppliers. Although we have implemented pass-through price increases to offset inflationary cost impacts, the price increases have often been implemented after we have experienced higher costs resulting in a lag effect to the full recovery of these costs. Furthermore, pricing increases that we implemented to pass through the increased costs had no added profit dollars and consequently did not fully offset the impact that the increased costs had on our gross and operating margin percentages. There can be no assurance that we will be successful in implementing pricing increases in the future to recover increased inflationary costs.

Impact of Interest Rates

Our business is subject to interest rate risk under the terms of our customer accounts receivable sales programs, as a change in the Term Secured Overnight Financing Rate (“Term SOFR”) or

18

alternative discount rate affects the cost incurred to factor eligible accounts receivable. Additionally, our outstanding borrowings under our credit facility bear interest at variable rates tied to Term SOFR or the applicable base rate. Under the terms of the credit facility, a change in interest rates affects the rate at which we can borrow funds thereunder and also impacts the interest cost on existing borrowings. During the three months ended April 1, 2023 as well as the year ended December 31, 2022, we saw significant increases in Term SOFR and other reference rates, which impacted our results as discussed in Results of Operations that follows. We expect interest rates may continue to increase in the foreseeable future, increasing the costs associated with our accounts receivable sales programs and outstanding borrowings.

Impact of Tariffs

In the third quarter of 2018, the Office of the United States Trade Representative (USTR) began imposing additional tariffs on products imported from China, including many of our products, ranging from 7.5% to 25%. The tariffs enacted to date increase the cost of many of the products that are manufactured for us in China. We have taken several actions to mitigate the impact of the tariffs including, but not limited to, price increases to our customers and cost concessions from our suppliers. We expect to continue mitigating the impact of tariffs primarily through selling price increases to offset the higher tariffs incurred. Tariffs are not expected to have a material impact on our net income but are expected to increase net sales and lower our gross and operating profit margins.

In January 2020, the USTR granted temporary tariff relief for certain categories of products being imported from China. The tariff relief granted by the USTR expired on most categories of products being imported from China at the end of 2020. However, in March 2022, the USTR reinstated tariff relief for certain categories of products imported from China. The reinstated tariff relief applies retroactively to October 12, 2021 and is scheduled to expire on September 30, 2023. The reinstated tariff relief applies to a limited number of our products and is not expected to materially impact our operating results.

Results of Operations

The following table sets forth, for the periods indicated, the percentage of net sales represented by certain items in our Condensed Consolidated Statements of Operations:

	Three Months Ended*
(in thousands, except percentage data)	April 1, 2023				March 26, 2022
Net sales	$	466,738	100.0	%	$	401,579	100.0	%
Cost of goods sold	322,261		69.0	%	268,339		66.8	%
Gross profit	144,477		31.0	%	133,240		33.2	%
Selling, general and administrative expenses	126,363		27.1	%	86,528		21.5	%
Income from operations	18,114		3.9	%	46,712		11.6	%
Interest expense, net	11,953		2.6	%	1,231		0.3	%
Other income, net	(357)		-0.1	%	(84)		0.0	%
Income before income taxes	6,518		1.4	%	45,565		11.3	%
Provision for income taxes	835		0.2	%	10,358		2.6	%
Net income	$	5,683	1.2	%	$	35,207	8.8	%

*Percentage of sales information may not add due to rounding

Three Months Ended April 1, 2023 Compared to Three Months Ended March 26, 2022

Net sales increased 16% to $466.7 million for the three months ended April 1, 2023 from $401.6 million for the three months ended March 26, 2022. The increase in net sales reflected the addition of

19

SuperATV in October 2022, successful new product launches, and price increases to offset inflationary costs. Net sales growth for the three months ended April 1, 2023 excluding SuperATV was 3.5%.

Gross profit margin was 31.0% of net sales for the three months ended April 1, 2023 compared to 33.2% of net sales for the three months ended March 26, 2022. The decline in gross margin as a percentage of net sales is primarily due to the sell-through of high-cost inventory purchased in 2022 that was impacted by inflationary costs, partially offset by the favorable impacts of pricing actions and the addition of SuperATV, which has a higher gross margin percentage than the Company average.

Selling, general and administrative expenses (“SG&A”) were $126.4 million, or 27.1% of net sales, for the three months ended April 1, 2023 compared to $86.5 million, or 21.5% of net sales, for the three months ended March 26, 2022. The increase in SG&A as a percentage of net sales was primarily due to the impact of higher interest rates on our customer accounts receivable factoring programs and the addition of SuperATV, which has higher SG&A expenses as a percentage of net sales than the Company average. SG&A expenses as a percentage of net sales also increased in the three months ended April 1, 2023 as a result of a charge recorded related to a customer bankruptcy filing.

Our effective tax rate was 12.8% for the three months ended April 1, 2023 compared to 22.7% for the three months ended March 26, 2022. The decrease in the effective tax rate was due to favorable discrete items in the quarter, partially offset by an increase in state tax expense and the effect of foreign operations.

Liquidity and Capital Resources

Historically, our primary sources of liquidity have been our invested cash and the cash flow we generate from our operations, including accounts receivable sales programs provided by certain customers. Cash and cash equivalents were $33.3 million at April 1, 2023 and $46.0 million at December 31, 2022. Working capital was $582.8 million at April 1, 2023 compared to $590.8 million at December 31, 2022. Shareholders’ equity was $1,049.1 million at April 1, 2023 and $1,042.6 million at December 31, 2022.

Based on our current operating plan, we believe that our sources of available capital are adequate to meet our ongoing cash needs for at least the next twelve months. However, our liquidity could be negatively affected by extending payment terms to customers, a decrease in demand for our products, increases in interest rates, the outcome of contingencies or other factors. See Note 7, “Commitments and Contingencies”, in the accompanying condensed consolidated financial statements for additional information regarding commitments and contingencies that may affect our liquidity.

Payment Terms and Accounts Receivable Sales Programs

Over the past several years, we have continued to extend payment terms to certain customers as a result of customer requests and market demands. These extended terms have resulted in increased accounts receivable levels and significant uses of cash. We participate in accounts receivable sales programs with several customers that allow us to sell our accounts receivable to financial institutions to offset the negative cash flow impact of these payment term extensions. However, any sales of accounts receivable through these programs ultimately result in us receiving a lesser amount of cash upfront than if we collected those accounts receivable ourselves in due course, resulting in accounts receivable factoring costs. Moreover, to the extent that any of these accounts receivable sales programs bear interest at rates tied to the Term SOFR or other reference rates, increases in these applicable rates increase our cost to sell our receivables and reduce the amount of cash we receive. See ITEM 3. Quantitative and Qualitative Disclosures about Market Risk for more information. Further extensions

20

of customer payment terms would result in additional uses of cash or increased costs associated with the sales of accounts receivable.

During the three months ended April 1, 2023 and March 26, 2022, we sold $237.7 million and $275.2 million of accounts receivable, respectively, under these programs. If receivables had not been sold over the previous twelve months, approximately $745.9 million and $722.3 million of additional accounts receivable would have been outstanding at April 1, 2023 and December 31, 2022, respectively, based on our standard payment terms. We had capacity to sell more accounts receivable under these programs if the needs of the business warranted. Further extensions of customer payment terms would result in additional uses of cash or increased costs associated with the sales of accounts receivable.

During the three months ended April 1, 2023 and March 26, 2022, factoring costs associated with these accounts receivable sales programs were $13.5 million and $4.9 million, respectively. The increase in factoring costs year over year was driven by higher Term SOFR and other reference rates.

Credit Agreement

The Company has a credit agreement that provides a $600.0 million revolving credit facility and includes a $500.0 million term loan with quarterly amortization payment requirements. The credit agreement matures on October 4, 2027. As of April 1, 2023, there was $215.5 million in outstanding borrowings under the revolving credit facility, and $493.8 million in outstanding borrowings under the term loan. Also on that date, we had three outstanding letters of credit for $1.0 million in aggregate. Net of outstanding borrowings and letters of credit, we had $383.5 million available under the credit facility at April 1, 2023.

Our credit agreement contains affirmative and negative covenants. As of April 1, 2023, we were not in default with respect to our credit agreement.

Refer to Note 7, “Long-Term Debt” to the Notes to Consolidated Financial Statements contained in PART II, ITEM 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, for additional information.

Cash Flows

The following summarizes the activities included in the Condensed Consolidated Statements of Cash Flows:

	Three Months Ended
(in thousands)	April 1, 2023		March 26, 2022
Cash provided by operating activities	$	26,210	$	23,214
Cash used in investing activities	(10,270)		(6,652)
Cash used in financing activities	(28,663)		(21,963)
Effect of foreign exchange on cash and cash equivalents	(4)		46
Net decrease in cash and cash equivalents	$	(12,727)	$	(5,355)

During the three months ended April 1, 2023, cash provided by operating activities was $26.2 million compared to $23.2 million during the three months ended March 26, 2022. The $3.0 million increase was driven by higher cash inflows for working capital, partially offset by lower income during the three months ended April 1, 2023, compared to the prior year period.

Investing activities used cash of $10.3 million and $6.7 million during the three months ended April 1, 2023 and March 26, 2022, respectively.

21

Financing activities used cash of $28.7 million and $22.0 million during the three months ended April 1, 2023 and March 26, 2022, respectively. During the three months ended April 1, 2023, we repaid $23.9 million of outstanding borrowings under our revolving credit facility, and $3.1 million of our term loan balance under our credit agreement. During the three months ended March 26, 2022, we repaid $10.0 million of outstanding borrowing under our revolving credit facility. We also paid $9.5 million to repurchase 98,350 shares of common stock under our share repurchase plan during the three months ended March 26, 2022. The remaining uses of cash from financing activities in each period resulted primarily from the repurchase of our common stock from our 401(k) Plan and income tax withholding in connection with the vesting of restricted stock awards (“RSAs”) and restricted stock units (“RSUs”).

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk

Our market risk is the potential loss arising from adverse changes in interest rates. Accounts receivable factored under our customer-sponsored accounts receivable sales programs bear interest at rates tied to Term SOFR or alternative discount rates and result in us incurring costs as those accounts receivable are factored. Additionally, interest expense from our variable rate debt is impacted by reference rates.

Under the terms of our customer-sponsored programs to sell accounts receivable, a change in the reference rate would affect the amount of financing costs we incur, and the amount of cash we receive upon the sales of accounts receivable under these programs. A one-percentage-point increase in Term SOFR or the discount rates on the accounts receivable sales programs would have increased our factoring costs and reduced the amount of cash we would have received by approximately $2.1 million for both the three months ended April 1, 2023 and March 26, 2022.

Under the terms of our credit agreement, a change in the reference rate or the lender’s base rate would affect the rate at which we could borrow funds thereunder. A one-percentage-point increase in the reference rate or base rate would have increased our interest expense on our variable rate debt under our credit agreement by approximately $1.8 million and $0.6 million for the three months ended April 1, 2023 and March 26, 2022, respectively.

ITEM 4. Controls and Procedures

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, conducted an evaluation, as of the end of the period covered by this report, of the effectiveness of our disclosure controls and procedures, as such term is defined in Exchange Act Rule 13a-15(e). Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures, as defined in Rule 13a-15(e), were effective at the reasonable assurance level.

On October 4, 2022, we completed our acquisition of Super ATV, LLC ("SuperATV"). We are in the process of evaluating the existing controls and procedures of SuperATV and integrating SuperATV into our internal control over financial reporting. In accordance with SEC Staff guidance permitting a company to exclude an acquired business from management’s assessment of the effectiveness of internal control over financial reporting for a period of one year following the date on which the acquisition is completed, we have excluded SuperATV from our assessment of the effectiveness of internal control over financial reporting as of April 1, 2023. Refer to Note 2 to the Condensed Consolidated Financial Statements for additional information.

22

Changes in Internal Control Over Financial Reporting

Except for the acquisition of SuperATV noted above, there was no change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act), that occurred during the three months ended April 1, 2023, that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Limitations on the Effectiveness of Controls

Control systems, no matter how well-conceived and operated, are designed to provide a reasonable, but not an absolute, level of assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected. The Company conducts periodic evaluations of its internal controls to enhance, where necessary, its procedures and controls.

23

PART II. OTHER INFORMATION

ITEM 1. Legal Proceedings

The information set forth under Note 8, “Commitments and Contingencies,” to the Notes to Condensed Consolidated Financial Statements contained in PART I, ITEM 1 of this report is incorporated herein by reference.

ITEM 1A. Risk Factors

There have been no material changes in our risk factors from the risks previously reported in PART 1, ITEM 1A, “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2022. You should carefully consider the factors discussed in PART I, ITEM 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022, which could materially affect our business, financial condition or future results. The risks described in our Annual Report on Form 10-K are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

During the three months ended April 1, 2023, we purchased shares of our common stock as follows:

Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (4)	Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs (4)
January 1, 2023 through January 28, 2023 (1)	222	$	84.50	—	$	227,989,218
January 29, 2023 through February 25, 2023 (2)	1,078	$	93.38	—	$	227,989,218
February 26, 2023 through April 1, 2023(3)	6,761	$	83.36	—	$	227,989,218
Total	8,061			—	$	227,989,218

(1)Includes 222 shares of our common stock withheld from participants for income tax withholding purposes in connection with the vesting of restricted stock awards (“RSAs”) during the period. The RSAs were granted to participants in prior periods pursuant to our 2008 Stock Option and Stock Incentive Plan (the “2008 Plan”).

(2)Includes 1,078 shares purchased from the 401(k) Plan.

(3)Includes 2,714 shares of our common stock withheld from participants for income tax withholding purposes in connection with the vesting of RSAs during the period. The RSAs were granted to participants in prior periods pursuant to the 2008 Plan and our 2018 Stock Option and Stock Incentive Plan. Also includes 4,047 shares purchased from the 401(k) Plan.

(4)On December 12, 2013 we announced that our Board of Directors authorized a share repurchase program, authorizing the repurchase of up to $10 million of our outstanding common stock by the end of 2014. Through several actions taken since that time, including most recently in July 2022, our Board of Directors has expanded the program to $600 million and extended the program through December 31, 2024. Under this program, share repurchases may be made from time to time depending on market conditions, share price, share availability and other factors at our discretion.

24

ITEM 3. Defaults Upon Senior Securities

None

ITEM 4. Mine Safety Disclosures

Not Applicable

ITEM 5. Other Information

None

ITEM 6. Exhibits

(a)Exhibits

The Exhibits included in this report are listed in the Exhibit Index on page 25, which is incorporated herein by reference.

EXHIBIT INDEX

3.1	Dorman Products, Inc. Amended and Restated By-Laws, as amended February 23, 2023.*
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. *
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. *
32	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished with this report). **
101	The following financial statements from the Dorman Products, Inc. Quarterly Report on Form 10-Q as of and for the quarter ended April 1, 2023, formatted in Inline XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Statements of Operations; (ii) the Condensed Consolidated Balance Sheets; (iii) Condensed Consolidated Statements of Shareholders’ Equity; (iv) the Condensed Consolidated Statements of Cash Flows and (v) the Notes to Condensed Consolidated Financial Statements.
104	The cover page from the Company’s Quarterly Report on Form 10-Q as of and for the quarter ended April 1, 2023, formatted in Inline XBRL (included as Exhibit 101).

*    Filed herewith

**    Furnished herewith

25

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 thereunto duly authorized.

Dorman Products, Inc.

May 2, 2023

/s/ Kevin M. Olsen

Kevin M. Olsen

President, Chief Executive Officer

(principal executive officer)

May 2, 2023

/s/ David M. Hession

David M. Hession

Senior Vice President and

Chief Financial Officer

(principal financial and accounting officer)

26

EX-3.1

Exhibit 3.1

DORMAN PRODUCTS, INC.

AMENDED AND RESTATED

BY-LAWS

DORMAN PRODUCTS, INC.

TABLE OF CONTENTS

Page

ARTICLE I    OFFICES	1
Section 1.1    Registered Office	1
ARTICLE II    MEETINGS OF SHAREHOLDERS	1
Section 2.1    Place of Meetings of Shareholders	1
Section 2.2    Annual Meeting of Shareholders	1
Section 2.3    Special Meetings of Shareholders	1
Section 2.4    Notices of Meetings of Shareholders	2
Section 2.5    Quorum of and Action by Shareholders	2
Section 2.6    Adjournments	3
Section 2.7    Voting List, Voting and Proxies	3
Section 2.8    Participation in Meetings by Conference Telephone or Other Electronic Technology	4
Section 2.9    Notice of Shareholder Proposals	4
Section 2.10    Notice of Nominations for Directors	8
Section 2.11    Conduct of Meetings	12
ARTICLE III    BOARD OF DIRECTORS	13
Section 3.1    General	13
Section 3.2    Place of Meetings	14
Section 3.3    Regular Meetings	14
Section 3.4    Special Meetings	14
Section 3.5    Participation in Meetings by Conference Telephone or Other Electronic Technology	14

i

Section 3.6    Notices of Meetings of Board of Directors	15
Section 3.7    Quorum; Action by the Board of Directors	15
Section 3.8    Informal Action by the Board of Directors	15
Section 3.9    Committees	15
Section 3.10    Powers and Duties of the Chairman of the Board and Vice Chairman of the Board	16
ARTICLE IV    OFFICERS	16
Section 4.1    Election and Office	16
Section 4.2    Term	16
Section 4.3    Powers and Duties of the President	17
Section 4.4    Powers and Duties of the Secretary	17
Section 4.5    Powers and Duties of the Treasurer	17
Section 4.6    Powers and Duties of Vice Presidents and Assistant Officers	17
Section 4.7    Delegation of Office	18
Section 4.8    Removal and Vacancies	18
ARTICLE V    CAPITAL STOCK	18
Section 5.1    Share Certificates	18
Section 5.2    Transfer of Shares	19
Section 5.3    Determination of Shareholders of Record	19
Section 5.4    Lost Share Certificates	20
Section 5.5    Uncertificated Shares	20
ARTICLE VI    NOTICES - COMPUTING TIME PERIODS	20
Section 6.1    Contents of Notice	20
Section 6.2    Method of Notice	20

ii

Section 6.3    Computing Time Periods	21
Section 6.4    Waiver of Notice	21
Section 6.5    Compliance with Law	21
Section 6.6    Shareholders without Forwarding Addresses	21
ARTICLE VII    LIMITATION OF DIRECTORS’ LIABILITY AND INDEMNIFICATION OF DIRECTORS, OFFICERS AND OTHER PERSONS	22
Section 7.1    Indemnification and Insurance	22
Section 7.2    Amendment	24
Section 7.3    Changes in Pennsylvania Law	25
ARTICLE VIII    FISCAL YEAR	25
Section 8.1    Determination of Fiscal Year	25
ARTICLE IX    AMENDMENTS	25
Section 9.1    Except as otherwise expressly provided in Section 7-3:	25
ARTICLE X    INTERPRETATION OF BY-LAWS -- SEPARABILITY -- DEFINITIONS	26
Section 10.1    Interpretation	26
Section 10.2    Separability	26
Section 10.3    Definitions	26
ARTICLE XI    DETERMINATIONS BY THE BOARD	26
Section 11.1    Effect of Board Determinations	26

iii

DORMAN PRODUCTS, INC.

AMENDED AND RESTATED BY-LAWS

These Amended and Restated By-laws (“By-laws”) are supplemental to the Pennsylvania Business Corporation Law of 1988 (“Pennsylvania BCL”) as the same shall from time to time be in effect.

ARTICLE I OFFICES

Section 1.1    Registered Office. The registered office of the Corporation shall be located within the Commonwealth of Pennsylvania at such place as the Board shall determine from time to time.

ARTICLE II MEETINGS OF SHAREHOLDERS

Section 2.1    Place of Meetings of Shareholders. Meetings of shareholders shall be held at such geographic locations, within or without the Commonwealth of Pennsylvania as may be fixed from time to time by the Board of Directors; provided, however, that the Board of Directors may determine, in their sole discretion, to hold a virtual meeting of shareholders by means of any electronic communications technology, including the Internet, in addition to or instead of a meeting at a particular geographic location, to the fullest extent now or hereafter permitted by the Pennsylvania BCL. If no such place is fixed by the Board of Directors, meetings of the shareholders shall be held at the registered office of the Corporation.

Section 2.2    Annual Meeting of Shareholders.

(a)    Time. A meeting of the shareholders of the Corporation shall be held in each calendar year, at such time as the Board of Directors may determine. If the annual meeting is not called and held within six months after the designated time, any shareholder may call the meeting at any time thereafter.

(b)    Election of Directors. At such annual meeting, there shall be held an election of Directors.

Section 2.3    Special Meetings of Shareholders. Except as expressly required by law, special meetings of the shareholders may be called at any time only by:

(a)    the Chairman of the Board, if any, if such officer is serving as the chief executive officer of the Corporation, and otherwise the President of the Corporation; or

(b)    the Board of Directors.

Upon the written request of any person who has called a special meeting and is entitled to do so under these By-laws or applicable law, which request specifies the general nature of the business to be transacted at such meeting, it shall be the duty of the Secretary to fix the time and place of such meeting, which shall be held no more than 60 days after the receipt of such request, and to give due notice thereof as required by Section 2-4 hereof. If the Secretary neglects or refuses to fix the time and place of such meeting, the person or persons calling the meeting may do so. Unless the Pennsylvania BCL requires otherwise, this Section 2-3 may not be amended, repealed or altered, and no other By-law may be adopted inconsistent with this Section 2-3, without the affirmative vote of the shareholders owning at least two-thirds of all shares

1

outstanding and entitled to vote, in person or by proxy, at any annual or special meeting of shareholders of the Corporation.

Section 2.4    Notices of Meetings of Shareholders. Written notice, complying with Article VI of these By-laws, stating the place and time and, in the case of special meetings, the general nature of the business to be transacted at any meeting of the shareholders shall be given to each shareholder of record entitled to vote at the meeting, except as provided in the Pennsylvania BCL, at least 10 days prior to the day named for the meeting. Such notices may be given by, or at the direction of, the Secretary or other authorized person. If the Secretary or other authorized person neglects or refuses to give notice of a meeting, the person or persons calling the meeting may do so.

Section 2.5    Quorum of and Action by Shareholders.

(a)    General Rule. Except as provided in subsections (c), (d) and (e) of this Section 2-5, the presence, in person or by proxy, of shareholders entitled to cast at least a majority of the votes that all shareholders are entitled to cast on a particular matter to be acted upon at the meeting shall constitute a quorum for the purpose of consideration and action on the matter.

(b)    Action by Shareholders. Whenever any corporate action is to be taken by vote of the shareholders of the Corporation at a duly organized meeting of shareholders, except as otherwise specifically provided by law, the Articles or these By-laws, it shall be authorized by a majority of the votes cast at the meeting by the holders of shares entitled to vote thereon. Unless the Pennsylvania BCL permits otherwise, this Section 2-5(b) may be modified only by a By-law amendment adopted by the shareholders.

(c)    Withdrawal. The shareholders present at a duly organized meeting can continue to do business until adjournment, notwithstanding the withdrawal of enough shareholders to leave less than a quorum.

(d)    Election of Directors at Adjourned Meetings. In the case of any meeting called for the election of Directors, those shareholders who attend a meeting called for the election of Directors that has been previously adjourned for lack of a quorum, although less than a quorum as fixed in subsection (a), shall nevertheless constitute a quorum for the purpose of electing Directors.

(e)    Conduct of Other Business at Adjourned Meetings. Those shareholders entitled to vote who attend a meeting of shareholders that has been previously adjourned for one or more periods aggregating at least 15 days because of an absence of a quorum, although less than a quorum as fixed in subsection (a), shall nevertheless constitute a quorum for the purpose of acting upon any matter set forth in the notice of meeting if the notice states that those shareholders who attend the adjourned meeting shall nevertheless constitute a quorum for the purpose of acting upon the matter.

Section 2.6    Adjournments.

(a)    General Rule. Adjournments of any regular or special meeting of shareholders, including one at which directors are to be elected, may be taken for such periods as the shareholders present and entitled to vote shall direct.

2

(b)    Lack of Quorum. If a meeting cannot be organized because a quorum has not attended, those present may, except as otherwise provided in the Pennsylvania BCL, adjourn the meeting to such time and place as they may determine.

(c)    Notice of an Adjourned Meeting. When a meeting of shareholders is adjourned, it shall not be necessary to give any notice of the adjourned meeting or of the business to be transacted at an adjourned meeting, other than by announcement at the meeting at which the adjournment is taken, unless the Board fixes a new record date for the adjourned meeting.

Section 2.7    Voting List, Voting and Proxies.

(a)    Voting List. The officer or agent having charge of the transfer books for shares of the Corporation shall make a complete list of the shareholders entitled to vote at any meeting of shareholders, arranged in alphabetical order, with the address of and the number of shares held by each. The list shall be produced and kept open at the time and place of the meeting and shall be subject to the inspection of any shareholder during the whole time of the meeting for the purposes thereof except that, if the Corporation has 5,000 or more shareholders, in lieu of the making of the list the Corporation may make the information therein available at the meeting by any other means.

(b)    Voting. Except as otherwise specifically provided by law, the Articles or these By-laws, all matters coming before the meeting shall be determined by a vote of shares and any matter to be so determined shall be authorized by a majority of the votes cast at a duly organized meeting of shareholders by the holders of shares entitled to vote thereon.

(c)    Proxies. At all meetings of shareholders, shareholders entitled to vote may attend and vote either in person or by proxy. Every proxy shall be executed or authenticated in accordance with the Pennsylvania BCL by the shareholder or by such shareholder’s duly authorized attorney-in-fact and filed with or transmitted to the Secretary of the Corporation. A proxy, unless coupled with an interest (as defined in the Pennsylvania BCL), shall be revocable at will, notwithstanding any other agreement or any provision in the proxy to the contrary, but the revocation of a proxy shall not be effective until notice thereof has been given in accordance with the Pennsylvania BCL to the Secretary of the Corporation. An unrevoked proxy shall not be valid after three years from the date of its execution, authentication or transmission unless a longer time is expressly provided therein. A proxy shall not be revoked by the death or incapacity of the maker unless, before the vote is counted or the authority is exercised, written notice of the death or incapacity is given to the Secretary of the Corporation.

(d)    Judges of Election. In advance of any meeting of shareholders of the Corporation, the Board of Directors may appoint one or three Judges of Election, who need not be shareholders and who will have such duties as provided in the Pennsylvania BCL, to act at the meeting or any adjournment thereof. If one or three Judges of Election are not so appointed, the presiding officer of the meeting may, and on the request of any shareholder shall, appoint one or three Judges of Election at the meeting. In case any person appointed as a Judge of Election fails to appear or refuses to act, the vacancy may be filled by appointment made by the Board of Directors in advance of the convening of the meeting or at the meeting by the presiding officer. A person who is a candidate for office to be filled at the meeting shall not act as a Judge of Election. Unless the Pennsylvania BCL permits otherwise, this Section 2-7(d) may be modified only by a By-law amendment adopted by the shareholders.

(e)    No Consents in Lieu of a Meeting. No action of the shareholders shall be taken by either unanimous consent or partial written consent or other consent in lieu of a

3

meeting. Unless the Pennsylvania BCL requires otherwise, this Section 2-7(e) may not be amended, repealed or altered, and no other By-law may be adopted inconsistent with this Section 2-7(e), without the affirmative vote of the shareholders owning at least two-thirds of all shares outstanding and entitled to vote, in person or by proxy, at any annual or special meeting of shareholders of the Corporation.

Section 2.8    Participation in Meetings by Conference Telephone or Other Electronic Technology. The Board may permit by resolution with respect to a particular meeting of the shareholders, or the presiding officer of such meeting may permit, that the presence or participation, including voting and taking other action, at a meeting of shareholders by a shareholder by conference telephone or other electronic means, including, without limitation, the Internet, shall constitute the presence of, or vote or action by, the shareholder. Unless the Board, or the presiding officer of such meeting, so permits, no person may so participate in a meeting of the shareholders by means of conference telephone or other electronic means.

Section 2.9    Notice of Shareholder Proposals.

(a)    At any annual or special meeting of the shareholders, only such business shall be conducted as shall have been properly brought before such meeting. To be properly brought before an annual or special meeting, business must be (i) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board, (ii) otherwise properly brought before the meeting by or at the direction of the Board, or (iii) otherwise properly and timely brought before the meeting by any shareholder of the Corporation in compliance with the notice procedures and other provisions of this Section 2-9.

(b)    For business to be properly brought before an annual or special meeting by a shareholder, such business must be a proper subject for shareholder action under the Pennsylvania BCL and other applicable law, as determined by the Chairman of the Board or such other person as is presiding over the meeting, and such shareholder (i) must be a shareholder of record on the date of the giving of the notice provided for in this Section 2-9 and on the record date for the determination of shareholders entitled to vote at such annual or special meeting, (ii) must be entitled to vote at such annual or special meeting, and (iii) must comply with the notice procedures set forth in this Section 2-9. In addition to any other applicable requirements, for business to be properly brought before an annual or special meeting by a shareholder, such shareholder must have given timely notice thereof in proper written form to the Secretary.

(c)    For an annual meeting of shareholders, to be timely, a shareholder’s notice must be delivered to, or mailed and received by, the Secretary of the Corporation at the principal executive offices of the Corporation not earlier than the close of business on the one hundred twentieth (120th) calendar day, and not later than the close of business on the ninetieth (90th) calendar day, prior to the first anniversary of the immediately preceding year’s annual meeting of shareholders; provided, however, that in the event that no annual meeting was held in the previous year or the annual meeting is called for a date that is more than thirty (30) calendar days earlier or more than sixty (60) calendar days later than such anniversary date, notice by the shareholder in order to be timely must be so delivered or received not earlier than the close of business on the one hundred twentieth (120th) calendar day prior to the date of such annual meeting and not later than the close of business on the later of the ninetieth (90th) calendar day prior to the date of such annual meeting or, if the first public disclosure of the date of such annual meeting is less than one hundred (100) calendar days prior to the date of such annual meeting, the tenth (10th) calendar day following the day on which public disclosure of the date of such annual meeting is first made by the Corporation. In no event shall any adjournment or

4

postponement of an annual meeting or the public disclosure thereof commence a new time period (or extend any time period) for the giving of a shareholder’s notice as described above.

(d)    For a special meeting of shareholders, to be timely, a shareholder’s notice must be delivered to, or mailed and received by, the Secretary of the Corporation at the principal executive offices of the Corporation not earlier than the close of business on the one hundred twentieth (120th) calendar day, and not later than the close of business on the ninetieth (90th) calendar day, prior to the date of such special meeting or, if the first public disclosure of the date of such special meeting is less than one hundred (100) calendar days prior to the date of such special meeting, the tenth (10th) calendar day following the day on which public disclosure of the date of such special meeting is first made by the Corporation. In no event shall any adjournment or postponement of a special meeting or the public disclosure thereof commence a new time period (or extend any time period) for the giving of a shareholder’s notice as described above.

(e)    To be in proper written form, a shareholder’s notice to the Secretary shall set forth in writing, as to each matter the shareholder proposes to bring before the meeting, the following: (i) a description of the business desired to be brought before the meeting, including the text of the proposal or business and the text of any resolutions proposed for consideration; (ii) the name and record address, as they appear on the Corporation’s stock ledger, of such shareholder and the name and address of any Shareholder Associated Person (as defined below); (iii) (A) the number of shares of each class and series of capital stock of the Corporation which are, directly or indirectly, owned beneficially and/or of record by such shareholder or any Shareholder Associated Person, documentary evidence of such record or beneficial ownership, and the date or dates such shares were acquired and the investment intent at the time such shares were acquired, (B) any option, warrant, convertible security, stock appreciation right, or similar right with an exercise or conversion privilege or a settlement payment or mechanism at a price related to any class or series of securities of the Corporation or with a value derived in whole or in part from the value of any class or series of shares of the Corporation, whether or not such instrument or right shall be subject to settlement in the underlying class or series of capital stock of the Corporation or otherwise (a “Derivative Instrument”) directly or indirectly owned beneficially by such shareholder or any Shareholder Associated Person and any other direct or indirect right held by such shareholder or any Shareholder Associated Person to profit from, or share in any profit derived from, any increase or decrease in the value of shares of the Corporation, (C) any proxy, contract, arrangement, understanding, or relationship pursuant to which such shareholder or any Shareholder Associated Person has a right to vote any securities of the Corporation, (D) any contract, arrangement, understanding, relationship or otherwise pursuant to which each such shareholder or any Shareholder Associated Person has the opportunity, directly or indirectly, to profit or share in any profit derived from any decrease in the value of any security issued by the Corporation (a “Short Interest”), indirectly or directly held by such shareholder or any Shareholder Associated Person in any security issued by the Corporation, (E) any rights to dividends on the shares of the Corporation owned beneficially by such shareholder or any Shareholder Associated Person that are separated or separable from the underlying securities of the Corporation, (F) any proportionate interest in securities of the Corporation or Derivative Instruments held, directly or indirectly, by a general or limited partnership in which such shareholder or any Shareholder Associated Person is a general partner or, directly or indirectly, beneficially owns an interest in a general partner, and (G) any performance-related fees (other than an asset-based fee) that such shareholder or any Shareholder Associated Person is entitled to based on any increase or decrease in the value of securities of the Corporation or Derivative Instruments, if any, as of the date of such notice, including without limitation any such interests held by members of such shareholder’s or any Shareholder Associated Person’s immediate family sharing the same household (which information, in each case, shall be supplemented by such shareholder and any Shareholder Associated Person not later

5

than ten (10) calendar days after the record date for the meeting to disclose such ownership as of the record date); (iv) a description of all arrangements or understandings between such shareholder and/or any Shareholder Associated Person and any other person or persons (naming such person or persons) in connection with the proposal of such business by such shareholder; (v) any material interest of such shareholder or any Shareholder Associated Person in such business, individually or in the aggregate, including any anticipated benefit to such shareholder or any Shareholder Associated Person therefrom; (vi) a representation from such shareholder as to whether the shareholder or any Shareholder Associated Person intends or is part of a group which intends (Y) to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the Corporation’s outstanding capital stock required to approve or adopt the proposal and/or (Z) otherwise to solicit proxies from shareholders in support of such proposal; (vii) a representation that such shareholder is a holder of record of stock of the Corporation entitled to vote at such meeting, that such shareholder intends to vote such stock at such meeting, and that such shareholder intends to appear at the meeting in person or by proxy to bring such business before such meeting; (viii) whether and the extent to which any agreement, arrangement or understanding has been made, the effect or intent of which is to increase or decrease the voting power of such shareholder or any Shareholder Associated Person with respect to any securities of the Corporation, without regard to whether such transaction is required to be reported on a Schedule 13D or other form in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or any successor provisions thereto and the rules and regulations promulgated thereunder; (ix) in the event that such business includes a proposal to amend these By-laws, the complete text of the proposed amendment; and (x) such other information regarding each matter of business to be proposed by such shareholder, regarding the shareholder in his or her capacity as a proponent of a shareholder proposal, or regarding any Shareholder Associated Person, that would be required to be disclosed in a proxy statement or other filings required to be made with the SEC in connection with the solicitations of proxies for such business pursuant to Section 14 of the Exchange Act (or pursuant to any law or statute replacing such section) and the rules and regulations promulgated thereunder. For purposes of these By-laws, a “Shareholder Associated Person” shall mean with respect to any shareholder (A) any person controlling, directly or indirectly, or acting in concert with, such shareholder, (B) any beneficial owner of securities of the Corporation owned of record or beneficially by such shareholder, and (C) any person controlling, controlled by or under common control with such Shareholder Associated Person.

(f)    If the information submitted pursuant to this Section 2-9 by any shareholder proposing business for consideration at an annual or special meeting shall be inaccurate to any material extent, such information may be deemed not to have been provided in accordance with this Section 2-9. Upon written request by the Secretary, the Board or any committee thereof, any shareholder proposing business for consideration at an annual or special meeting shall provide, within seven (7) business days of delivery of such request (or such other period as may be specified in such request), written verification, satisfactory in the discretion of the Board, any committee thereof or any authorized officer of the Corporation, to demonstrate the accuracy of any information submitted by the shareholder pursuant to this Section 2-9. If a shareholder fails to provide such written verification within such period, the information as to which written verification was requested may be deemed not to have been provided in accordance with this Section 2-9.

(g)    For purposes of these By-laws, “public disclosure” shall be deemed to include a disclosure made in a (A) press release reported by the Dow Jones News Service, Reuters Information Service, Associated Press or any comparable or successor national news wire service, or (B) in a document filed by the Corporation with the SEC pursuant to Section 13, 14 or 15(d) of the Exchange Act or any successor provisions thereto.

6

(h)    No business (other than nominations of persons for election to the Board which shall be made in accordance with the procedures set forth in Section 2-10 of these By-laws) shall be conducted at the annual or special meeting of shareholders except business brought before the annual or special meeting in accordance with the procedures set forth in this Section 2-9.

(i)    Except as otherwise required by the Pennsylvania BCL and other applicable law, the Articles or these By-laws, the Chairman of the Board or other person presiding at an annual or special meeting shall have the power and duty (i) to determine whether any business proposed to be brought before the annual or special meeting was properly brought before the meeting in accordance with the procedures set forth in this Section 2-9, including whether the shareholder or any Shareholder Associated Person on whose behalf the proposal is made, solicited (or is part of a group which solicited) or did not so solicit, as the case may be, proxies in support of such shareholder’s proposal in compliance with such shareholder’s representation as required by this Section 2-9, and (ii) if any proposed business was not brought in compliance with this Section 2-9, to declare that such proposal is defective and shall be disregarded.

(j)    In addition to the provisions of this Section 2-9, a shareholder shall also comply with all applicable requirements of the Pennsylvania BCL, other applicable law and the Exchange Act, and the rules and regulations thereunder, with respect to the matters set forth herein, provided, however, that any references in these By-laws to the Exchange Act or the rules promulgated thereunder are not intended to and shall not limit the requirements applicable to shareholder proposals to be considered pursuant to Section 2-9(a)(iii) of these By-laws.

(k)    Nothing in this Section 2-9 shall be deemed to affect any rights of shareholders to request the inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act.

(l)    Notwithstanding anything in this Section 2-9 to the contrary, a shareholder intending to nominate one or more persons for election as a director at any meeting of shareholders must comply with Section 2-10 of these By-laws for any such nomination to be properly brought before such meeting.

Section 2.10    Notice of Nominations for Directors.

(a)    Annual Meetings of Shareholders.

(i)    Nominations of persons for election to the Board at an annual meeting of shareholders may be made (A) by or at the direction of the Board or a committee appointed by the Board, or (B) by any shareholder of the Corporation (i) who is a shareholder of record on the date of the giving of the notice provided for in this Section 2-10(a), on the record date for the determination of the shareholders entitled to vote at such annual meeting of shareholders and at the time of such annual meeting of shareholders, (ii) who is entitled to vote at the annual meeting of shareholders, and (iii) who complies with the notice procedures set forth in this Section 2-10(a) as to such nominations, including, but not limited to, the procedures regarding such notice’s timeliness and required form, and to the extent that Rule 14a-19 under the Exchange Act applies, has complied with Rule 14a-19 under the Exchange Act.

(ii)    To be considered timely, a shareholder’s notice of nomination must be delivered to, or mailed and received by, the Secretary at the principal executive offices of the Corporation not earlier than the close of business on the one hundred twentieth (120th)

7

calendar day, and not later than the close of business on the ninetieth (90th) calendar day, prior to the first anniversary of the immediately preceding year’s annual meeting; provided, however, that in the event that no annual meeting was held in the previous year or the annual meeting is called for a date that is more than thirty (30) calendar days earlier or more than sixty (60) calendar days later than such anniversary date, notice by the shareholder in order to be timely must be so delivered or received not earlier than the close of business on the one hundred twentieth (120th) calendar day prior to the date of such annual meeting and not later than the close of business on the later of the ninetieth (90th) calendar day prior to the date of such annual meeting or, if the first public disclosure of the date of such annual meeting is less than one hundred (100) calendar days prior to the date of such annual meeting, the tenth (10th) calendar day following the day on which public disclosure of the date of such annual meeting is first made by the Corporation. In no event shall any adjournment or postponement of an annual meeting or the public disclosure thereof commence a new time period (or extend any time period) for the giving of a shareholder’s notice as described above.

To be in proper written form, a shareholder’s notice of nomination to the Secretary (whether given pursuant to this Section 2-10(a) or Section 2-10(b) of these By-laws) shall set forth in writing the following: (a) as to each person whom the shareholder proposes to nominate for election or reelection as a director (i) the name, age, business address and residence address of such person; (ii) the principal occupation and employment of such person; (iii) the number of shares of each class and series of capital stock of the Corporation which are owned beneficially or of record by such person (which information shall be supplemented not later than ten (10) calendar days after the record date for the meeting to disclose such ownership as of the record date); (iv) such person’s executed written consent to being named in any proxy statement and other proxy materials as a nominee and to serving as a director if elected; (v) all information relating to such person that would be required to be disclosed in a proxy statement or other filings required to be made with the SEC in connection with the solicitation of proxies for the election of directors in a contested election pursuant to Section 14 of the Exchange Act (or pursuant to any law or statute replacing such section), and the rules and regulations promulgated thereunder; (vi) a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three years, and any other material relationships, between or among such person being nominated, on the one hand, and the shareholder and any Shareholder Associated Person, on the other hand, including, without limitation, all information that would be required to be disclosed pursuant to Item 404 promulgated under Regulation S-K of the Exchange Act if the shareholder making the nomination and any Shareholder Associated Person were the “registrant” for purposes of such rule and the person being nominated were a director or executive officer of such registrant; and (vii) a statement as to whether such person, if elected, intends to comply with all applicable corporate governance and other policies and guidelines of the Corporation applicable to directors and in effect during such person’s term in office as a director, including, without limitation, the director resignation provisions set forth in the Corporation’s Corporate Governance Guidelines; and (b) as to the shareholder giving the notice (i) the name and record address of such shareholder, as they appear on the Corporation’s stock ledger, and the name and address of any Shareholder Associated Person; (ii) (A) the number of shares of each class and series of capital stock of the Corporation which are, directly or indirectly, owned beneficially and/or of record by such shareholder or any Shareholder Associated Person, documentary evidence of such record or beneficial ownership, and the date or dates such shares were acquired and the investment intent at the time such shares were acquired, (B) any Derivative Instrument directly or indirectly owned beneficially by such shareholder or any Shareholder Associated Person and any other direct or indirect right held by such shareholder or any Shareholder Associated Person to profit from, or share in any profit derived from, any increase or decrease in the value of shares of the Corporation, (C) any proxy, contract, arrangement, understanding, or relationship pursuant to

8

which such shareholder or any Shareholder Associated Person has a right to vote any shares of any security of the Corporation, (D) any Short Interest directly or indirectly held by such shareholder or any Shareholder Associated Person in any security issued by the Corporation, (E) any rights to dividends on the shares of the Corporation owned beneficially by such shareholder or any Shareholder Associated Person that are separated or separable from the underlying shares of the Corporation, (F) any proportionate interest in shares of the Corporation or Derivative Instruments held, directly or indirectly, by a general or limited partnership in which such shareholder or any Shareholder Associated Person is a general partner or, directly or indirectly, beneficially owns an interest in a general partner, and (G) any performance-related fees (other than an asset-based fee) that such shareholder or any Shareholder Associated Person is entitled to based on any increase or decrease in the value of shares of the Corporation or Derivative Instruments, if any, as of the date of such notice, including without limitation, any such interests held by members of such shareholder’s or any Shareholder Associated Person’s immediate family sharing the same household (which information shall, in each case, be supplemented by such shareholder and any Shareholder Associated Person not later than ten (10) calendar days after the record date for the meeting to disclose such ownership as of the record date); (iii) a description of all arrangements or understandings between such shareholder or any Shareholder Associated Person and each proposed nominee and any other person or persons (naming such person or persons) pursuant to which the nomination(s) are to be made by such shareholder; (iv) any material interest of such shareholder or any Shareholder Associated Person in the election of such proposed nominee, individually or in the aggregate, including any anticipated benefit to the shareholder or any Shareholder Associated Person therefrom; (v) a representation that such shareholder is a holder of record of stock of the Corporation entitled to vote at such meeting and that such shareholder intends to appear in person or by proxy at the meeting to nominate the person or persons named in its notice; (vi) a representation from the shareholder as to whether the shareholder or any Shareholder Associated Person intends or is part of a group which intends to deliver a proxy statement and/or form of proxy to holders representing at least sixty-seven percent (67%) of the Corporation’s voting shares entitled to vote on the election of directors in support of such nominee or nominees; (vii) a representation as to whether or not the shareholder or any Shareholder Associated Person intends to solicit proxies or votes in support of such nominee or nominees in accordance with Rule 14a-19 under the Exchange Act; (viii) whether and the extent to which any agreement, arrangement or understanding has been made, the effect or intent of which is to increase or decrease the voting power of such shareholder or such Shareholder Associated Person with respect to any shares of the capital stock of the Corporation, without regard to whether such transaction is required to be reported on a Schedule 13D or other form in accordance with Section 13(d) of the Exchange Act or any successor provisions thereto and the rules and regulations promulgated thereunder; and (ix) any other information relating to such shareholder and any Shareholder Associated Person that would be required to be disclosed in a proxy statement or other filings required to be made with the SEC in connection with solicitations of proxies for the election of directors in a contested election pursuant to Section 14 of the Exchange Act (or pursuant to any law or statute replacing such section) and the rules and regulations promulgated thereunder. In addition to the information required above, the Corporation may require any proposed nominee to furnish such other information as may reasonably be required by the Corporation to determine the eligibility of such proposed nominee to serve as an independent director of the Corporation or that could be material to a reasonable shareholder’s understanding of the independence, or lack thereof, of such nominee.

(iii)    Notwithstanding anything in this Section 2-10 to the contrary, in the event that the number of directors to be elected to the Board at an annual meeting of the stockholders is increased and there is no public disclosure by the Corporation, naming all of the nominees for directors or specifying the size of the increased Board, at least ninety (90) calendar days prior to the first anniversary of the date of the immediately preceding year’s annual

9

meeting, a shareholder’s notice required by this Section 2-10 shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to, or mailed and received by, the Secretary at the principal executive offices of the Corporation not later than the close of business on the tenth (10th) calendar day following the day on which such public disclosure is first made by the Corporation.

(b)    Special Meetings of Stockholders. Nominations of persons for election to the Board may be made at a special meeting of shareholders at which directors are to be elected (i) pursuant to the Corporation’s notice of meeting, (ii) by or at the direction of the Board, or (iii) provided that the Board has determined that directors shall be elected at such meeting, by any shareholder of the Corporation who (A) is a shareholder of record at the time of giving of notice provided for in this Section 2-10(b), (B) is a shareholder of record on the record date for the determination of the shareholders entitled to vote at such meeting, (C) is a shareholder of record at the time of such meeting, (D) is entitled to vote at such meeting, and (E) complies with the notice procedures set forth in this Section 2-10(b) as to such nominationand, to the extent that Rule 14a-19 under the Exchange Act applies, has complied with Rule 14a-19 under the Exchange Act. In the event the Corporation calls a special meeting of shareholders for the purpose of electing one or more directors to the Board, any such shareholder may nominate a person or persons (as the case may be) for election to such position(s) as specified in the Corporation’s notice of meeting, if the proper form of shareholder’s notice required by Section 2-10(a)(ii) of these By-laws with respect to any nomination shall be delivered to the Secretary at the principal executive offices of the Corporation not earlier than the close of business on the one hundred twentieth (120th) calendar day prior to the date of such special meeting and not later than the close of business on the later of the ninetieth (90th) calendar day prior to the date of such special meeting or, if the first public disclosure made by the Corporation of the date of such special meeting is less than one hundred (100) days prior to the date of such special meeting, not later than the tenth (10th) calendar day following the day on which public disclosure is first made of the date of the special meeting and of the nominees proposed by the Board to be elected at such meeting. In no event shall any adjournment or postponement of a special meeting or the public disclosure thereof commence a new time period (or extend any time period) for the giving of a shareholder’s notice as described above.

(c)    General.

(i)    If the information submitted pursuant to this Section 2-10 by any shareholder proposing a nominee for election as a director at a meeting of shareholders shall be inaccurate to any material extent, such information may be deemed not to have been provided in accordance with this Section 2-10. Upon written request by the Secretary, the Board or any committee thereof, any shareholder proposing a nominee for election as a director at a meeting shall provide, within seven (7) business days of delivery of such request (or such other period as may be specified in such request), written verification, satisfactory in the discretion of the Board, any committee thereof or any authorized officer of the Corporation, to demonstrate the accuracy of any information submitted by the shareholder pursuant to this Section 2-10. If a shareholder fails to provide such written verification within such period, the information as to which written verification was requested may be deemed not to have been provided in accordance with this Section 2-10.

(ii)    Notwithstanding anything in these By-laws to the contrary, no person shall be eligible for election as a director of the Corporation at any meeting of shareholders unless nominated in accordance with the procedures set forth in this Section 2-10.

10

(iii)    Notwithstanding anything in these By-laws to the contrary, if a shareholder who has submitted a written notice of intention to propose a nominee for election as a director at a meeting of shareholders (or a designated representative of the shareholder) does not appear at the annual or special meeting of shareholders of the Corporation to present the nomination, such nomination shall be disregarded notwithstanding that proxies in respect of such vote may have been received by the Corporation.

(iv)    Except as otherwise required by the Pennsylvania BCL and other applicable law, the Articles or these By-laws, the Chairman of the Board or other person presiding at the meeting shall have the power and duty (A) to determine whether any nomination proposed to be brought before the meeting was properly made in accordance with the procedures set forth in this Section 2-10, including whether the shareholder or any Shareholder Associated Person on whose behalf the nomination is made, solicited (or is part of a group which solicited) or did not so solicit, as the case may be, proxies in support of the election of such shareholder’s nominee(s) in compliance with such shareholder’s representation as required by this Section 2¬10, and (B) if any proposed nomination was not made in compliance with this Section 2-10, to declare that such nomination is defective and shall be disregarded.

(v)    In addition to the provisions of this Section 2-10, a shareholder shall also comply with all applicable requirements of the Pennsylvania BCL, other applicable law and the Exchange Act, and the rules and regulations thereunder, with respect to the matters set forth herein (including, without limitation, Rule 14a-19 under the Exchange Act), the Articles and these By-Laws, provided, however, that any references in these By-laws to the Exchange Act or the rules promulgated thereunder are not intended to and shall not limit the applicable requirements for nominations by shareholders to be considered pursuant to Section 2-10(a) or Section 2-10(b) of these By-laws.

(vi)    A shareholder is not entitled to have its nominees included in the Corporation’s proxy materials solely as a result of such shareholder’s compliance with the foregoing provisions of Section 2-10, except in accordance with Rule 14a-19 promulgated under the Exchange Act and other applicable requirements of state and federal law. The Corporation will not be required to include in its proxy materials any successor, substitute or replacement nominee if a shareholder’s notice is not timely pursuant to this Section 2-10 with respect to such successor, substitute or replacement nominee.

(vii)    Notwithstanding the foregoing provisions of this Section 2-10, unless otherwise required by law, if any shareholder (i) provides notice pursuant to Rule 14a-19(a)(1) under the Exchange Act and (ii) subsequently fails to comply with the requirements of Rule 14a-19(a)(2) and Rule 14a-19(a)(3) under the Exchange Act, then the Corporation shall disregard any proxies or votes solicited for any persons nominated by such shareholder and such nomination shall be disregarded. Upon request by the Corporation, if any shareholder provides notice pursuant to Rule 14a-19(a)(1) under the Exchange Act, such shareholder shall deliver to the Corporation, no later than five (5) business days prior to the applicable meeting of shareholders, reasonable evidence that it has met the requirements of Rule 14a-19(a)(3) under the Exchange Act. In the event that a shareholder providing notice no longer intends to solicit proxies in accordance with Rule 14a-19, such shareholder shall provide notice to the Corporation of such intention as promptly as practicable. Any shareholder directly or indirectly soliciting proxies from other shareholders must use a proxy card color other than white, which shall be reserved for exclusive use by the Board.

11

Section 2.11    Conduct of Meetings. The Chairman of the Board shall preside at all shareholders’ meetings. In the absence of the Chairman of the Board, the Chief Executive Officer shall preside or, in his or her absence, any officer designated by the Board shall preside. The Secretary, or, in the Secretary’s absence, an Assistant Secretary, or in the absence of both the Secretary and Assistant Secretaries, a person appointed by the chairman of the meeting shall serve as secretary of the meeting. In the event that the Secretary presides at a meeting of the shareholders, an Assistant Secretary shall record the minutes of the meeting. To the maximum extent permitted by law, the Board of the Corporation shall be entitled to make such rules or regulations for the conduct of meetings of shareholders as it shall deem necessary, appropriate or convenient. Subject to such rules and regulations of the Board, if any, the chairman of the meeting shall have the right and authority to prescribe such rules, regulations and procedures and take such action as, in the discretion of such chairman, are deemed necessary, appropriate or convenient for the proper conduct of the meeting. Such rules, regulations and procedures, whether adopted by the Board or prescribed by the chairman of the meeting, may include, without limitation, the following: (i) establishing an agenda for the meeting and the order for the consideration of the items of business on such agenda; (ii) restricting admission to the time set for the commencement of the meeting; (iii) limiting attendance at the meeting to shareholders of record of the Corporation entitled to vote at the meeting, their duly authorized proxies or other such persons as the chairman of the meeting may determine; (iv) limiting participation at the meeting on any matter to shareholders of record of the Corporation entitled to vote on such matter, their duly authorized proxies or other such persons as the chairman of the meeting may determine to recognize and, as a condition to recognizing any such participant, requiring such participant to provide the chairman of the meeting with evidence of his or her name and affiliation, whether he or she is a shareholder or a proxy for a shareholder, and the number of shares of each class and series of capital stock of the Corporation which are owned beneficially and/or of record by such shareholder; (v) limiting the time allotted to questions or comments by participants; (vi) determining when the polls should be opened and closed for voting; (vii) taking such actions as are necessary or appropriate to maintain order, decorum, safety and security at the meeting; (viii) removing any shareholder who refuses to comply with meeting procedures, rules or guidelines as established by the chairman of the meeting; (ix) adjourning the meeting to a later date, time and place announced at the meeting by the chairman; and (x) complying with any state and local laws and regulations concerning safety and security. Unless otherwise determined by the chairman of the meeting, meetings of shareholders shall not be required to be held in accordance with the rules of parliamentary procedure.

ARTICLE III BOARD OF DIRECTORS

Section 3.1    General.

(a)    General Powers. Except as otherwise provided by law and these By-laws, all powers of the Corporation shall be exercised by or under the authority of, and the business and affairs of the Corporation shall be managed under the direction of, the Board of Directors. The Board of Directors may appoint a Chairman and one or more Vice-Chairmen from among its members. Unless the Pennsylvania BCL permits otherwise, this Section 3-1(a) may be modified only by a By-law amendment adopted by the shareholders.

(b)    Number. The Board of Directors shall consist of between 2 and 9 members as determined by the Board of Directors from time to time. Unless the Pennsylvania BCL requires otherwise, this Section 3-1(b) may not be amended, repealed or altered, and no other By-law may be adopted inconsistent with this Section 3-1(b), without the affirmative vote of the shareholders owning at least two-thirds of all shares outstanding and entitled to vote, in person or by proxy, at any annual or special meeting of shareholders of the Corporation.

12

(c)    Vacancies. Each Director shall hold office until the expiration of the term for which he was selected and until his successor has been selected and qualified or until his earlier death, resignation or removal. Any vacancies on the Board of Directors, including vacancies resulting from an increase in the number of Directors, may be filled by a majority vote of the remaining members of the Board (though less than a quorum) or by a sole remaining Director, and each person so selected shall be a Director to serve for the balance of the unexpired term and thereafter until his successor has been selected and qualified, except in the event of his earlier death, resignation or removal. Unless the Pennsylvania BCL requires otherwise, this Section 3-1(c) may not be amended, repealed or altered, and no other By-law may be adopted inconsistent with this Section 3-1(c), without the affirmative vote of the shareholders owning at least two-thirds of all shares outstanding and entitled to vote, in person or by proxy, at any annual or special meeting of shareholders of the Corporation.

(d)    Removal by the Shareholders. The entire Board of Directors or any individual Director may be removed from office for cause by vote of the shareholders entitled to vote thereon. An individual Director shall not be removed (unless the entire board is removed) from the Board if shareholders are entitled to vote cumulatively for the Board or a class of the Board and if votes are cast against the resolution for his removal which, if cumulatively voted at an annual or other regular election of Directors, would be sufficient to elect one or more Directors to the Board. Unless the Pennsylvania BCL permits otherwise, this Section 3-1(d) may be modified only by a By-law amendment adopted by the shareholders.

(e)    Removal by the Board. The Board of Directors may declare vacant the office of a Director who has been judicially declared of unsound mind or who has been convicted of an offense punishable by imprisonment for a term of more than one year or if, within 60 days after notice of his or her selection, the Director does not accept the office either in writing or by attending a meeting of the Board of Directors.

(f)    Qualification. A Director must be a natural person at least 18 years of age.

(g)    Definition of “Cause.” For purposes of this Section 3-1, “cause” shall mean (i) a final conviction of a felony involving moral turpitude and which is subject to imprisonment for more than one year, or (ii) willful misconduct that is materially and demonstrably injurious economically to the Corporation. For purposes of this definition of “cause,” no act, or failure to act, by a director shall be considered “willful” unless committed in bad faith and without a reasonable belief that the act or failure to act was in the best interest of the Corporation or any affiliate of the Corporation. “Cause” shall not exist unless and until the Corporation has delivered to the director a written notice of the director’s failure to act that constitutes “cause” and, if cure is possible, such director shall not have cured such act or omission within ninety (90) days after the delivery of such notice.

Section 3.2    Place of Meetings. Meetings of the Board of Directors may be held at such place within or without the Commonwealth of Pennsylvania as a majority of the Directors may appoint from time to time or as may be designated in the notice of the meeting.

Section 3.3    Regular Meetings. A regular meeting of the Board of Directors shall be held annually, immediately following the annual meeting of the shareholders, at the place where such meeting of the shareholders is held or at such other place and time as a majority of the Directors in office after the annual meeting of shareholders may designate. At such meeting, the Board of Directors shall elect officers of the Corporation. In addition to such regular meeting, the Board of Directors shall have the power to fix by resolution the place and time of other regular meetings of the Board.

13

Section 3.4    Special Meetings. Special meetings of the Board of Directors shall be held whenever ordered (i) by the Chairman of the Board, if any, (ii) by the President, (iii) by a majority of the executive committee, if any, or (iv) by a majority of the Directors in office.

Section 3.5    Participation in Meetings by Conference Telephone or Other Electronic Technology. Any Director may participate in any meeting of the Board of Directors or of any committee (provided such Director is otherwise entitled to participate), be counted for the purpose of determining a quorum thereof and exercise all rights and privileges to which such Director might be entitled were he or she personally in attendance, including the right to vote, or any other rights attendant to presence in person at such meeting, by means of conference telephone or other electronic technology by means of which all persons participating in the meeting can hear each other.

Section 3.6    Notices of Meetings of Board of Directors.

(a)    Regular Meetings. No notice shall be required to be given of any regular meeting, unless the same is held at other than the place or time for holding such meeting as fixed in accordance with Section 3-3 of these By-laws, in which event notice shall be given, as provided in Article VI, at least one (1) day in advance of the time fixed for the meeting, specifying the place and time of such meeting.

(b)    Special Meetings. Written notice stating the place and time of any special meeting of the Board of Directors shall be sufficient if given, as provided in Article VI, at least one (1) day in advance of the time fixed for the meeting.

Section 3.7    Quorum; Action by the Board of Directors. A majority of the Directors in office shall be necessary to constitute a quorum for the transaction of business and the acts of a majority of the Directors present and voting at a meeting at which a quorum is present shall be the acts of the Board of Directors. If there is no quorum present at a duly convened meeting of the Board of Directors, the majority of those present may adjourn the meeting from time to time and place to place.

Section 3.8    Informal Action by the Board of Directors. Any action required or permitted to be taken at a meeting of the Directors, or of the members of any committee of the Board of Directors, may be taken without a meeting if, prior or subsequent to the action, a written consent or consents thereto by all of the Directors in office (or members of the committee with respect to committee action) is filed with the Secretary of the Corporation. In addition to other means of filing with the Secretary, insertion in the minute book of the Corporation shall be deemed filing with the Secretary regardless of whether the Secretary or some other authorized person has actual possession of the minute book.

Section 3.9    Committees.

(a)    Establishment and Powers. The Board of Directors of the Corporation may, by resolution adopted by a majority of the Directors in office, establish one or more committees to consist of one or more Directors of the Corporation. Any committee, to the extent provided in the resolution of the Board of Directors or in the By-laws or as otherwise set forth in a committee charter approved by the Board of Directors, shall have and may exercise all of the powers and authority of the Board of Directors, except that a committee shall not have any power or authority as to the following:

14

(i)    The submission to shareholders of any action requiring approval of shareholders by the Pennsylvania BCL;

(ii)    The creation or filling of vacancies in the Board of Directors;

(iii)    The adoption, amendment or repeal of the By-laws;

(iv)    The amendment or repeal of any resolution of the Board of Directors that by its terms is amendable or repealable only by the Board of Directors; or

(v)    Action on matters committed by the By-laws or resolution of the Board of Directors to another committee of the Board of Directors.

(b)    Alternate Members. The Board of Directors may designate one or more Directors as alternate members of any committee who may replace any absent or disqualified member at any meeting of the committee or for the purpose of any written action by the committee. In the absence or disqualification of a member and alternate member or members of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he, she or they constitute a quorum, may unanimously appoint another Director to act at the meeting in the place of the absent or disqualified member.

(c)    Term. Each committee of the Board of Directors shall serve at the pleasure of the Board of Directors.

(d)    Status of Committee Action. The term “Board of Directors” or “Board,” when used in any provision of these By-laws relating to the organization or procedures of or the manner of taking action by the Board of Directors, shall be construed to include and refer to any executive or other committee of the Board of Directors. Any provision of these By-laws relating or referring to action to be taken by the Board of Directors or the procedure required therefor shall be satisfied by the taking of corresponding action by a committee of the Board of Directors to the extent authority to take the action has been delegated to the committee.

Section 3.10    Powers and Duties of the Chairman of the Board and Vice Chairman of the Board. Unless otherwise determined by the Board of Directors, the Chairman of the Board, if any, shall preside at all meetings of Directors. The Chairman of the Board shall have such other powers and perform such other duties as may be assigned to the Chairman by the Board of Directors. The Vice Chairmen of the Board, if any, shall have such powers and perform such duties as the Chairman of the Board or the Board of Directors shall assign. The Chairman of the Board shall be the superior officer of the Vice Chairmen. To be eligible to serve, the Chairman of the Board or Vice Chairman must be a Director of the Corporation.

ARTICLE IV OFFICERS

Section 4.1    Election and Office. The Corporation shall have a President, a Secretary and a Treasurer who shall be elected by the Board of Directors. The Board of Directors may elect as additional officers including, one or more Vice Presidents, and one or more other officers or assistant officers. Any number of offices may be held by the same person. The President and the Secretary shall be natural persons of the age of 18 years or older. The Treasurer may be a corporation, but if a natural person shall be of the age of 18 years or older.

Section 4.2    Term. The officers and assistant officers shall each serve at the pleasure of the Board of Directors until the first meeting of the Board of Directors following the next

15

annual meeting of shareholders, unless removed from office by the Board of Directors during their respective tenures. Officers may, but need not, be Directors.

Section 4.3    Powers and Duties of the President. Unless otherwise determined by the Board of Directors, the President shall have the usual duties of an executive officer with general supervision over and direction of the affairs of the Corporation. The President shall be the chief executive officer of the Corporation unless the Chairman of the Board is serving as chief executive officer, in which event the President shall be chief operating officer of the Corporation. In the exercise of these duties and subject to the actions of the Board of Directors, the President may appoint, suspend, and discharge employees, agents and assistant officers, fix the compensation of all officers and assistant officers, shall preside at all meetings of the shareholders at which the President shall be present and, unless there is a Chairman of the Board, shall preside at all meetings of the Board of Directors. The President shall also have such other powers and perform such other duties as from time to time may be assigned to the President by the Board of Directors.

Unless otherwise determined by the Board of Directors, the President shall have full power and authority on behalf of the Corporation to attend and to act and to vote at any meeting of the shareholders of any corporation in which this Corporation may hold stock and, at any such meeting, shall possess and may exercise any and all of the rights and powers incident to the ownership of such stock and which, as the owner thereof, the Corporation might have possessed and exercised. The President shall also have the right to delegate such power.

Section 4.4    Powers and Duties of the Secretary. Unless otherwise determined by the Board of Directors, the Secretary shall be responsible for the keeping of the minutes of all meetings of the Board of Directors and the shareholders, in books provided for that purpose, and for the giving and serving of all notices for the Corporation. The Secretary shall perform all other duties ordinarily incident to the office of Secretary and shall have such other powers and perform such other duties as may be assigned to the Secretary by the Board of Directors. The minute books of the Corporation may be held by a person other than the Secretary.

Section 4.5    Powers and Duties of the Treasurer. Unless otherwise determined by the Board of Directors, the Treasurer shall have charge of all the funds and securities of the Corporation which may come into such officer’s hands. When necessary or proper, unless otherwise determined by the Board of Directors, the Treasurer shall endorse for collection on behalf of the Corporation checks, notes and other obligations, and shall deposit the same to the credit of the Corporation to such banks or depositories as the Board of Directors may designate and may sign all receipts and vouchers for payments made to the Corporation. The Treasurer shall sign all checks made by the Corporation, except when the Board of Directors shall otherwise direct. The Treasurer shall be responsible for the regular entry in books of the Corporation to be kept for such purpose of a full and accurate account of all funds and securities received and paid by the Treasurer on account of the Corporation. Whenever required by the Board of Directors, the Treasurer shall render a statement of the financial condition of the Corporation. The Treasurer shall have such other powers and shall perform such other duties as may be assigned to such officer from time to time by the Board of Directors. The Treasurer shall give such bond, if any, for the faithful performance of the duties of such office as shall be required by the Board of Directors.

Section 4.6    Powers and Duties of Vice Presidents and Assistant Officers. Unless otherwise determined by the Board of Directors, each Vice Chairman, Vice President and each assistant officer shall have such powers and perform such duties of his or her respective superior officer as may be delegated to him or her by such superior officer. Vice Presidents and assistant

16

officers shall have such rank as may be designated by the Board of Directors. Vice Presidents may be designated as having responsibility for a specific area of the Corporation’s affairs, in which event such Vice President shall be superior to the other Vice Presidents in relation to matters within his or her area. The President shall be the superior officer of the Vice Presidents. The Treasurer and Secretary shall be the superior officers of the Assistant Treasurers and Assistant Secretaries, respectively.

Section 4.7    Delegation of Office. The Board of Directors may delegate or reallocate the powers or duties of any officer of the Corporation to or among any other person or persons from time to time.

Section 4.8    Removal and Vacancies. The Board of Directors shall have the power to remove any officer from office at any time for any reason, and to fill any vacancies in any office occurring for any reason.

ARTICLE V CAPITAL STOCK

Section 5.1    Share Certificates.

(a)    Execution. Except as otherwise provided in Section 5-5, the shares of the Corporation shall be represented by certificates. Unless otherwise provided by the Board of Directors, every share certificate shall be signed by two officers and sealed with the corporate seal, which may be a facsimile, engraved or printed, but where such certificate is signed by a transfer agent or a registrar, the signature of any corporate officer upon such certificate may be a facsimile, engraved or printed. In case any officer who has signed, or whose facsimile signature has been placed upon, any share certificate shall have ceased to be such officer because of death, resignation or otherwise, before the certificate is issued, it may be issued with the same effect as if the officer had not ceased to be such at the date of its issue. The provisions of this Section 5-1 shall be subject to any inconsistent or contrary agreement at the time between the Corporation and any transfer agent or registrar.

(b)    Designations, etc. To the extent that the Corporation is authorized to issue shares of more than one class or series, every certificate shall set forth upon the face or back of the certificate (or shall state on the face or back of the certificate that the Corporation will furnish to any shareholder upon request and without charge) a full or summary statement of the designations, voting rights, preferences, limitations and special rights of the shares of each class or series authorized to be issued so far as they have been fixed and determined, and the authority of the Board of Directors to fix and determine the designations, voting rights, preferences, limitations and special rights of the classes and series of shares of the Corporation.

(c)    Fractional Shares. Except as otherwise determined by the Board of Directors, shares or certificates therefor may be issued as fractional shares for shares held by any dividend reinvestment plan or employee benefit plan created or approved by the Corporation’s Board of Directors, but not by any other person.

Section 5.2    Transfer of Shares. Transfer of shares shall be made on the books of the Corporation only upon surrender of the certificate or certificates representing such shares, duly endorsed or with duly executed stock powers attached and otherwise in proper form for transfer, which certificate or certificates shall be cancelled at the time of the transfer.

Section 5.3    Determination of Shareholders of Record.

17

(a)    Fixing Record Date. The Board of Directors of the Corporation may fix a time prior to the date of any meeting of shareholders as a record date for the determination of the shareholders entitled to notice of, or to vote at, the meeting, which time, except in the case of an adjourned meeting, shall be not more than 90 days prior to the date of the meeting of shareholders. Only shareholders of record on the date fixed shall be so entitled notwithstanding any transfer of shares on the books of the Corporation after any record date fixed as provided in this subsection. The Board of Directors may similarly fix a record date for the determination of shareholders of record for any other purpose. When a determination of shareholders of record has been made as provided in this Section for purposes of a meeting, the determination shall apply to any adjournment thereof unless the Board of Directors fixes a new record date for the adjourned meeting.

(b)    Determination when No Record Date Fixed. If a record date is not fixed:

(i)    The record date for determining shareholders entitled to notice of or to vote at a meeting of shareholders shall be at the close of business on the day next preceding the day on which notice is given or, if notice is waived, at the close of business on the day immediately preceding the day on which the meeting is held.

(ii)    The record date for determining shareholders entitled to dissent to corporate action in writing without a meeting, when prior action by the Board of Directors is not necessary, shall be the close of business on the day on which the first dissent is filed with the Secretary of the Corporation.

(iii)    The record date for determining shareholders for any other purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.

(c)    Certification by Nominee. The Board of Directors may adopt a procedure whereby a shareholder of the Corporation may certify in writing to the Corporation that all or a portion of the shares registered in the name of the shareholder are held for the account of a specified person or persons. The resolution of the Board of Directors may set forth:

(i)    the classification of shareholder who may certify;

(ii)    the purpose or purposes for which the certification may be made;

(iii)    the form of certification and information to be contained therein;

(iv)    if the certification is with respect to a record date, the time after the record date within which the certification must be received by the Corporation; and

(v)    such other provisions with respect to the procedure as are deemed necessary or desirable.

Upon receipt by the Corporation of a certification complying with the procedure, the persons specified in the certification shall be deemed, for the purposes set forth in the certification, to be the holders of record of the number of shares specified in place of the shareholder making the certification.

Section 5.4    Lost Share Certificates. Unless waived in whole or in part by the Board of Directors, any person requesting the issuance of a new certificate in lieu of an alleged lost,

18

destroyed, mislaid or wrongfully taken certificate shall (a) give to the Corporation his or her bond of indemnity with an acceptable surety, and (b) satisfy such other requirements as may be imposed by the Corporation. Thereupon, a new share certificate shall be issued to the registered owner or his or her assigns in lieu of the alleged lost, destroyed, mislaid or wrongfully taken certificate, provided that the request therefore and issuance thereof have been made before the Corporation has notice that such shares have been acquired by a bona fide purchaser.

Section 5.5    Uncertificated Shares. Notwithstanding anything herein to the contrary, any or all classes and series of shares, or any part thereof, may be represented by uncertificated shares to the extent determined by the Board of Directors, except that shares represented by a certificate that is issued and outstanding shall continue to be represented thereby until the certificate is surrendered to the Corporation. Within a reasonable time after the issuance or transfer of uncertificated shares, the Corporation shall send to the registered owner thereof a written notice containing the information required to be set forth or stated on certificates. The rights and obligations of the holders of shares represented by certificates and the rights and obligations of the holders of uncertificated shares of the same class and series shall be identical. Notwithstanding anything herein to the contrary, the provisions of Section 5-2 shall be inapplicable to uncertificated shares and in lieu thereof the Board of Directors shall adopt alternative procedures for registration of transfers.

ARTICLE VI NOTICES - COMPUTING TIME PERIODS

Section 6.1    Contents of Notice. Whenever any notice of a meeting is required to be given pursuant to these By-laws or otherwise, the notice shall specify the place and time of the meeting; in the case of a special meeting of shareholders or where otherwise required by law or the By-laws, the general nature of the business to be transacted at such meeting; and any other information required by law.

Section 6.2    Method of Notice. Any notice required to be given to any person under the provisions of these By-laws or otherwise may be given to the person either personally or by sending a copy thereof (i) by first class or express mail, postage prepaid, or courier service, charges prepaid, to such person’s address appearing on the books of the Corporation or, in the case of Directors, supplied by such Director to the Corporation for the purpose of notice. If the notice is sent by mail, or courier service, it shall be deemed to have been given to the person entitled thereto when deposited in the United States mail with a courier service for delivery to that person; or (ii) by facsimile transmission, e-mail or other electronic communication to his facsimile number or address for e-mail or other electronic communications supplied by him to the Corporation for the purpose of notice. Notice by facsimile, e-mail or other electronic communication shall be deemed to have been given to the person entitled thereto when sent. Except as otherwise provided herein, or as otherwise directed by the Board of Directors, notices of meetings may be given by, or at the direction of, the Secretary. The provisions of this Section 6-2 are subject to the provision of Section 6-3(b) with respect to one day notice.

Section 6.3    Computing Time Periods.

(a)    Days to be Counted. In computing the number of days for purposes of these By-laws, all days shall be counted, including Saturdays, Sundays or a holiday on which national banks are or may elect to be closed (“Holiday”); provided, however, that if the final day of any time period falls on a Saturday, Sunday or Holiday, then the final day shall be deemed to be the next day which is not a Saturday, Sunday or Holiday. In computing the number of days for the purpose of giving notice of any meeting, the date upon which the notice is given shall be counted but the day set for the meeting shall not be counted.

19

(b)    One Day Notice. In any case where only one day’s notice is being given, notice must be given at least 24 hours in advance by delivery in person, or by electronic communication, or at least 48 hours in advance if given by courier service.

Section 6.4    Waiver of Notice. Whenever any notice is required to be given by law (including the provisions of the Pennsylvania BCL) or the Articles or these By-laws, a waiver thereof in writing, signed by the person or persons entitled to the notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of the notice. Neither the business to be transacted at, nor the purpose of, a meeting need be specified in the waiver of notice of the meeting. Attendance of a person at any meeting shall constitute a waiver of notice of the meeting except where a person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting was not lawfully called or convened.

Section 6.5    Compliance with Law. Whenever any notice or communication is required to be given to any person under the provisions of the Pennsylvania BCL or by the Articles, these By-laws, the terms of any agreement or other instrument or as a condition precedent to taking any corporate action, and communication with that person is then unlawful, the giving of the notice or communication to that person shall not be required.

Section 6.6    Shareholders without Forwarding Addresses. Notices or other communications need not be sent to any shareholder with whom the Corporation has been unable to communicate for more than 24 consecutive months because communications to the shareholder are returned unclaimed or the shareholder has otherwise failed to provide the Corporation with a current address. Whenever such a shareholder provides the Corporation with a current address, the Corporation shall commence sending notices and other communications to such shareholder in the same manner as to other shareholders.

ARTICLE VII LIMITATION OF DIRECTORS’ LIABILITY AND INDEMNIFICATION OF DIRECTORS, OFFICERS AND OTHER PERSONS

Section 7.1    Indemnification and Insurance.

(a)    Mandatory Indemnification. The Corporation shall, to the fullest extent permitted by applicable law, indemnify its directors and officers who were or are a party or are threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (whether or not such action, suit or proceeding arises or arose by or in the right of the Corporation or other entity) by reason of the fact that such director or officer is or was a director or officer of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee, general partner, agent or fiduciary of another corporation, partnership, joint venture, trust or other enterprise (including service with respect to employee benefit plans), against expenses (including, but not limited to, reasonable attorneys’ and investigation fees and costs), judgments, fines (including excise taxes assessed on a person with respect to any employee benefit plan) and amounts paid in settlement actually and reasonably incurred by such director or officer in connection with such action, suit or proceeding, except as otherwise provided in Section 7-1(c) hereof. A director or officer of the Corporation entitled to indemnification under this Section 7-1(a) is hereafter called a “person covered by Section 7-1(a) hereof.”

(b)    Expenses. Expenses incurred by a person covered by Section 7-1(a) hereof in defending a threatened, pending or completed civil or criminal action, suit or proceeding shall be paid by the Corporation in advance of the final disposition of such action,

20

suit or proceeding upon receipt of an undertaking by or on behalf of such person to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the Corporation, except as otherwise provided in Section 7-1(c).

(c)    Exceptions. No indemnification under Section 7-1(a) or advancement or reimbursement of expenses under Section 7-1(b) shall be provided to a person covered by Section 7-1(a) hereof: (i) with respect to expenses or the payment of profits arising from the purchase or sale of securities of the Corporation in violation of Section 16(b) of the Securities Exchange Act of 1934, as amended; (ii) if a final unappealable judgment or award establishes that such director or officer engaged in intentional misconduct or a transaction from which the director or officer derived an improper personal benefit; (iii) for expenses or liabilities of any type whatsoever (including, but not limited to, judgments, fines, and amounts paid in settlement) which have been paid directly to, or for the benefit of, such person by an insurance carrier under a policy of officers’ and directors’ liability insurance whose premiums are paid for by the Corporation or by an individual or entity other than such director or officer; and (iv) for amounts paid in settlement of any threatened, pending or completed action, suit or proceeding without the written consent of the Corporation, which written consent shall not be unreasonably withheld. The Board of Directors of the Corporation is hereby authorized, at any time by resolution, to add to the above list of exceptions from the right of indemnification under Section 7-1(a) or advancement or reimbursement of expenses under Section 7-1(b), but any such additional exception shall not apply with respect to any event, act or omission which occurred prior to the date that the Board of Directors in fact adopts such resolution. Any such additional exception may, at any time after its adoption, be amended, supplemented, waived or terminated by further resolution of the Board of Directors of the Corporation.

(d)    Continuation of Rights. The indemnification and advancement or reimbursement of expenses provided by, or granted pursuant to, this Article VII shall continue as to a person who has ceased to be a member, director or officer of the Corporation, and shall inure to the benefit of the heirs, executors and administrators of such person.

(e)    General Provisions.

(i)    The term “to the fullest extent permitted by applicable law”, as used in this Article VII shall mean the maximum extent permitted by public policy, common law or statute. Any person covered by Section 7-1(a) hereof may, to the fullest extent permitted by applicable law, elect to have the right to indemnification or to advancement or reimbursement of expenses, interpreted, at such person’s option; (i) on the basis of the applicable law on the date this Section was approved by the shareholders; or (ii) on the basis of the applicable law in effect at the time of the occurrence of the event, act or omission giving rise to the action, suit or proceeding, or (iii) on the basis of the applicable law in effect at the time indemnification is sought.

(ii)    The right of a person covered by Section 7-1(a) hereof to be indemnified or to receive an advancement or reimbursement of expenses pursuant to Section 7-1(b) (A) may be enforced as a contract right pursuant to which the person entitled thereto may bring suit as if the provisions hereof were set forth in a separate written contract between the Corporation and such person; (B) to the fullest extent permitted by applicable law, is intended to be retroactive and shall be available with respect to events, acts or omissions occurring prior to the adoption hereof; and (C) shall continue to exist after the rescission or restrictive modification (as determined by such person) of any provision of this Article VII with respect to events, acts and omissions occurring before such rescission or restrictive modification is adopted.

21

(iii)    If a request for indemnification or for the advancement or reimbursement of expenses pursuant hereto is not paid in full by the Corporation within thirty (30) days after a written claim has been received by the Corporation together with all supporting information reasonably requested by the Corporation, the claimant may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim (plus interest at the prime rate announced from time to time by the Corporation’s primary lending bank) and, if successful in whole or in part, the claimant shall be entitled also to be paid the expenses (including, but not limited to, attorneys’ and investigation fees and costs) of prosecuting such claim. Neither the failure of the Corporation (including its Board of Directors or independent legal counsel) to have made a determination prior to the commencement of such action that indemnification of or the advancement or reimbursement of expenses to the claimant is proper in the circumstances, nor an actual determination by the Corporation (including its Board of Directors or independent legal counsel) that the claimant is not entitled to indemnification or to the reimbursement or advancement of expenses, shall be a defense to the action or create a presumption that the claimant is not so entitled.

(iv)    The indemnification and advancement or reimbursement of expenses provided by, or granted pursuant to, this Article VII shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement or reimbursement of expenses may be entitled under any by-law, agreement, vote of shareholders or disinterested directors or otherwise.

(v)    Nothing contained in this Article VII shall be construed to limit the rights and powers the Corporation possesses under Chapter 17, Subchapter D of the Pennsylvania BCL or otherwise, including, but not limited to, the powers to purchase and maintain insurance, create funds to secure or insure its indemnification obligations, and any other rights or powers the Corporation may otherwise have under applicable law.

(vi)    The provisions of this Article VII may, at any time (and whether before or after there is any basis for a claim for indemnification or for the advancement or reimbursement of expenses pursuant hereto), be amended, supplemented, waived, or terminated, in whole or in part, with respect to any person covered by Section 7-1(a) hereof by a written agreement signed by the Corporation and such person.

(vii)    The Corporation shall have the right to appoint the attorney for a person covered by Section 7-1(a) hereof, provided such appointment is not unreasonable under the circumstances.

(f)    Optional Indemnification. The Corporation may, to the fullest extent permitted by applicable law, indemnify, and advance or reimburse expenses for, persons in all situations other than that covered by Section 7-1(a) or (b).

(g)    Insurance. The Corporation may purchase and maintain insurance, at its expense, for the benefit of any person on behalf of whom insurance is permitted to be purchased by Pennsylvania law against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person under Pennsylvania or other law. The Corporation may also purchase and maintain insurance to insure its indemnification obligations whether arising hereunder or otherwise.

(h)    Fund For Payment of Expenses. The Corporation may create a fund of any nature, which may, but need not, be under the control of a trustee, or otherwise may secure

22

in any manner its indemnification obligations, whether arising hereunder, under the Articles, by agreement, vote of shareholders or Directors, or otherwise.

Section 7.2    Amendment. The provisions of this Article VII relating to the limitation of Directors’ liability, to indemnification and to the advancement of expenses shall constitute a contract between the Corporation and each of its Directors and officers which may be modified as to any Director or officer only with that person’s consent or as specifically provided in this Section. Notwithstanding any other provision of these By-laws relating to their amendment generally, any repeal or amendment of this Article VII which is adverse to any Director or officer shall apply to such Director or officer only on a prospective basis, and shall not reduce any limitation on the personal liability of a Director of the Corporation or limit the rights of an Indemnitee to indemnification or to the advancement of expenses with respect to any action or failure to act occurring prior to the time of such repeal or amendment. Notwithstanding any other provision of these By-laws, no repeal or amendment of these By-laws shall affect any or all of this Article so as either to reduce the limitation of Directors’ liability or limit indemnification or the advancement of expenses in any manner unless adopted by (a) the unanimous vote of the Directors of the Corporation then serving, or (b) the affirmative vote of the shareholders owning at least two-thirds of all shares outstanding and entitled to vote, in person or by proxy, at an annual or special meeting of shareholders of the Corporation; provided, that no such amendment shall have retroactive effect inconsistent with the preceding sentence.

Section 7.3    Changes in Pennsylvania Law. References in this Article VII to Pennsylvania law or to any provision thereof shall be to such law as it existed on the date this Article VII was adopted or as such law thereafter may be changed; provided that (a) in the case of any change which expands the liability of Directors or limits the indemnification rights or the rights to advancement of expenses which the Corporation may provide, the rights to limited liability, to indemnification and to the advancement of expenses provided in this Article shall continue as theretofore to the extent permitted by law; and (b) if such change permits the Corporation without the requirement of any further action by shareholders or Directors to limit further the liability of Directors (or limit the liability of officers) or to provide broader indemnification rights or rights to the advancement of expenses than the Corporation was permitted to provide prior to such change, then liability thereupon shall be so limited and the rights to indemnification and the advancement of expenses shall be so broadened to the extent permitted by law.

ARTICLE VIII FISCAL YEAR

Section 8.1    Determination of Fiscal Year. The Board of Directors shall have the power by resolution to fix the fiscal year of the Corporation. If the Board of Directors shall fail to do so, the President shall fix the fiscal year.

ARTICLE IX AMENDMENTS

Section 9.1    Except as otherwise expressly provided in Section 7-3:

(a)    Shareholders. The shareholders entitled to vote thereon shall have the power to alter, amend, or repeal these By-laws, by the vote of shareholders entitled to cast at least a majority of the votes which all shareholders are entitled to cast thereon, at any regular or special meeting, duly convened after notice to the shareholders of such purpose. In the case of a meeting of shareholders to amend or repeal these By-laws, written notice shall be given to each shareholder that the purpose, or one of the purposes, of the meeting is to consider the adoption, amendment or repeal of the By-laws.

23

(b)    Board of Directors. The Board of Directors (but not a committee thereof), by a vote of the majority of Directors then in office, shall have the power to alter, amend, and repeal these By-laws, regardless of whether the shareholders have previously adopted the By-law being amended or repealed, subject to the power of the shareholders to change such action; provided, that the Board of Directors shall not have the power to amend these By-laws on any subject that is expressly committed to the shareholders by the express terms of the Pennsylvania BCL, the Articles or these By-laws.

ARTICLE X INTERPRETATION OF BY-LAWS -- SEPARABILITY -- DEFINITIONS

Section 10.1    Interpretation. All words, terms and provisions of these By-laws shall be interpreted and defined by and in accordance with the Pennsylvania BCL.

Section 10.2    Separability. The provisions of these By-laws are independent of and separable from each other, and no provision shall be affected or rendered invalid or unenforceable by virtue of the fact that for any reason any other or others of them may be invalid or unenforceable in whole or in part.

Section 10.3    Definitions. For purposes of these By-laws:

(a)    the “Articles” means the Articles of Incorporation;

(b)    the “Board” means the Board of Directors; and

(c)    the “Pennsylvania BCL” means the Pennsylvania Business Corporation Law of 1988, as amended.

ARTICLE XI DETERMINATIONS BY THE BOARD

Section 11.1    Effect of Board Determinations. Any determination involving interpretation or application of these By-laws made in good faith by the Board of Directors shall be final, binding and conclusive on all parties in interest.

24

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Kevin M. Olsen certify that:

1.I have reviewed this Form 10-Q of Dorman Products, Inc. (the “registrant”);

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 2, 2023

/s/ Kevin M. Olsen

Kevin M. Olsen

President, Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, David M. Hession certify that:

1.I have reviewed this Form 10-Q of Dorman Products, Inc. (the “registrant”);

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 2, 2023

/s/ David M. Hession

David M. Hession

Senior Vice President and
Chief Financial Officer

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

This Certification is intended to accompany the Quarterly Report of Dorman Products, Inc. (the “Company”) on Form 10-Q for the period ended April 1, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), and is given solely for the purpose of satisfying the requirements of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. To the best of their knowledge, the undersigned, in their respective capacities as set forth below, hereby certify that:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Kevin M. Olsen

Kevin M. Olsen

President, Chief Executive Officer

Date: May 2, 2023

/s/ David M. Hession

David M. Hession

Senior Vice President and
Chief Financial Officer

Date: May 2, 2023

The foregoing certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Section 1350 of Chapter 63 of Title 18 of the United States Code) and is not being filed as part of the Report or as a separate disclosure document.

XML

Cover - shares	3 Months Ended
	Apr. 01, 2023	Apr. 27, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Apr. 01, 2023
Document Transition Report	false
Entity File Number	0-18914
Entity Registrant Name	Dorman Products, Inc.
Entity Address, State or Province	PA
Entity Tax Identification Number	23-2078856
Entity Address, Address Line One	3400 East Walnut Street
Entity Address, City or Town	Colmar
Entity Incorporation, State or Country Code	PA
Entity Address, Postal Zip Code	18915
City Area Code	215
Local Phone Number	997-1800
Title of 12(b) Security	Common stock, par value $0.01 per share
Trading Symbol	DORM
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		31,468,334
Entity Central Index Key	0000868780
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q1
Amendment Flag	false

XML

Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Apr. 01, 2023	Mar. 26, 2022
Income Statement [Abstract]
Net sales	$ 466,738	$ 401,579
Cost of goods sold	322,261	268,339
Gross profit	144,477	133,240
Selling, general and administrative expenses	126,363	86,528
Income from operations	18,114	46,712
Interest expense, net	11,953	1,231
Other income, net	(357)	(84)
Income before income taxes	6,518	45,565
Provision for income taxes	835	10,358
Net income	5,683	35,207
Other comprehensive income:
Change in foreign currency translation adjustment	119	1,696
Comprehensive Income	$ 5,802	$ 36,903
Earnings per share:
Earning per share, basic (in dollars per share)	$ 0.18	$ 1.12
Earning per share, diluted (in dollars per share)	$ 0.18	$ 1.11
Weighted average shares outstanding:
Weighted average shares outstanding, basic (in shares)	31,436	31,499
Weighted average shares outstanding, diluted (in shares)	31,537	31,601

XML

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Apr. 01, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 33,307	$ 46,034
Accounts receivable, less allowance for doubtful accounts of $1,398 and $1,363	429,308	427,385
Inventories	686,949	755,901
Prepaids and other current assets	40,173	39,800
Total current assets	1,189,737	1,269,120
Property, plant and equipment, net	151,541	148,477
Operating lease right-of-use assets	108,549	109,977
Goodwill	443,336	443,035
Intangible assets, net	316,999	322,409
Other assets	50,497	48,768
Total assets	2,260,659	2,341,786
Current liabilities:
Accounts payable	145,686	179,819
Accrued compensation	14,606	19,490
Accrued customer rebates and returns	170,432	192,116
Revolving credit facility	215,460	239,363
Current portion of long-term debt	12,500	12,500
Other accrued liabilities	48,239	35,007
Total current liabilities	606,923	678,295
Long-term debt	479,439	482,464
Long-term operating lease liabilities	96,571	98,221
Other long-term liabilities	16,749	28,349
Deferred tax liabilities, net	11,833	11,826
Commitments and contingencies
Shareholders’ equity:
Common stock, $0.01 par value; 50,000,000 shares authorized; 31,469,310 and 31,430,632 shares issued and outstanding in 2023 and 2022, respectively	315	314
Additional paid-in capital	90,416	88,750
Retained earnings	961,597	956,870
Accumulated other comprehensive loss	(3,184)	(3,303)
Total shareholders’ equity	1,049,144	1,042,631
Total liabilities and shareholders' equity	$ 2,260,659	$ 2,341,786

XML

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Apr. 01, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Allowance for doubtful accounts and customer credits	$ 1,398	$ 1,363
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	50,000,000	50,000,000
Common stock, shares issued (in shares)	31,469,310	31,430,632
Common stock, shares outstanding (in shares)	31,469,310	31,430,632

XML

Condensed Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Retained Earnings	Accumulated Other Comprehensive Income (Loss)
Beginning balance (in shares) at Dec. 25, 2021		31,607,509
Beginning balance at Dec. 25, 2021	$ 932,736	$ 316	$ 77,451	$ 856,409	$ (1,440)
Exercise of stock options (in shares)		2,478
Exercise of stock options	0
Compensation expense under Incentive Stock Plan	2,152		2,152
Purchase and cancellation of common stock (in shares)		(111,114)
Purchase and cancellation of common stock	(10,917)	$ (1)	(200)	(10,716)
Issuance of non-vested stock, net of cancellations (in shares)		(2,511)
Issuance of non-vested stock, net of cancellations	377		377
Other stock related activity, net of tax (in shares)		(16,446)
Other stock-related activity, net of tax	(1,851)		(874)	(977)
Other comprehensive income	1,696				1,696
Net income	35,207			35,207
Ending balance (in shares) at Mar. 26, 2022		31,479,916
Ending balance at Mar. 26, 2022	$ 959,400	$ 315	78,906	879,923	256
Beginning balance (in shares) at Dec. 31, 2022	31,430,632	31,430,632
Beginning balance at Dec. 31, 2022	$ 1,042,631	$ 314	88,750	956,870	(3,303)
Exercise of stock options (in shares)		15,630
Exercise of stock options	1,049		1,049
Compensation expense under Incentive Stock Plan	2,312		2,312
Purchase and cancellation of common stock (in shares)		(5,125)
Purchase and cancellation of common stock	(433)		(9)	(424)
Issuance of non-vested stock, net of cancellations (in shares)		52,151
Issuance of non-vested stock, net of cancellations	0	$ 1	(1)
Other stock related activity, net of tax (in shares)		(23,978)
Other stock-related activity, net of tax	(2,217)		(1,685)	(532)
Other comprehensive income	119				119
Net income	$ 5,683			5,683
Ending balance (in shares) at Apr. 01, 2023	31,469,310	31,469,310
Ending balance at Apr. 01, 2023	$ 1,049,144	$ 315	$ 90,416	$ 961,597	$ (3,184)

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Apr. 01, 2023	Mar. 26, 2022
Cash Flows from Operating Activities:
Net income	$ 5,683	$ 35,207
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation, amortization and accretion	13,540	9,743
Provision for doubtful accounts	2,744	29
Provision for stock-based compensation	2,334	2,152
Changes in assets and liabilities:
Accounts receivable	(4,673)	16,727
Inventories	68,935	(33,034)
Prepaids and other current assets	(591)	(853)
Other assets	(2,130)	(1,976)
Accounts payable	(34,258)	(12,392)
Accrued customer rebates and returns	(21,683)	7,202
Accrued compensation and other liabilities	(3,691)	409
Cash provided by operating activities	26,210	23,214
Cash Flows from Investing Activities:
Acquisition, net of cash acquired	267	595
Property, plant and equipment additions	(10,537)	(7,247)
Cash used in investing activities	(10,270)	(6,652)
Cash Flows from Financing Activities:
Payments of revolving credit line	(23,900)	(10,000)
Payments of long-term debt	(3,125)	0
Proceeds from exercise of stock options	1,049	0
Purchase and cancellation of common stock	(433)	(10,752)
Other stock-related activity	(2,254)	(1,211)
Cash used in financing activities	(28,663)	(21,963)
Effect of exchange rate changes on Cash and Cash Equivalents	(4)	46
Net Decrease in Cash and Cash Equivalents	(12,727)	(5,355)
Cash and Cash Equivalents, Beginning of Period	46,034	58,782
Cash and Cash Equivalents, End of Period	33,307	53,427
Supplemental Cash Flow Information
Cash paid for interest expense	11,534	999
Cash paid for income taxes	$ 1,055	$ 712

XML

Basis of Presentation	3 Months Ended
	Apr. 01, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation	Basis of PresentationAs used herein, unless the context requires otherwise, “Dorman,” the “Company,” “we,” “us,” or “our” refers to Dorman Products, Inc. and its subsidiaries. Our ticker symbol on the NASDAQ Global Select Market is “DORM.”The accompanying unaudited condensed consolidated financial statements have been prepared under U.S. generally accepted accounting principles (“GAAP”) for interim financial information and under the rules and regulations of the U.S. Securities and Exchange Commission. However, they do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of only normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three months ended April 1, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2023 or any future period. We may experience significant fluctuations from quarter to quarter in our results of operations due to the timing of orders placed by our customers and the introduction of new products and product lines to customers. These financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

XML

Acquisitions

3 Months Ended

Apr. 01, 2023

Business Combination and Asset Acquisition [Abstract]

Acquisitions

Acquisitions

On October 4, 2022 (the “Closing Date”), Dorman acquired 100% of the issued and outstanding equity interests of Super ATV, LLC ("SuperATV") (the “Transaction”), for aggregate consideration of $509.8 million (net of $6.8 million cash acquired), plus a potential earn-out payment to the sellers of SuperATV not to exceed $100 million in the aggregate, which remains subject to the achievement by SuperATV of certain revenue and gross margin targets in the years ending December 31, 2023 and December 31, 2024. In the three months ended April 1, 2023, we received $0.3 million in cash as proceeds from the closing net working capital adjustments. SuperATV is a leading independent supplier to the powersports aftermarket with a family of highly respected brands spanning functional accessories and upgrades, as well as replacement parts for specialty vehicles.

The Transaction was accounted for as a business combination under the acquisition method of accounting. We have allocated the purchase price to tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values. The allocation of the purchase price to the assets acquired and liabilities assumed, including the residual amount allocated to goodwill, as of December 31, 2022, is based upon preliminary information and is subject to change within the permitted measurement period (up to one year from the acquisition date) as additional information concerning final asset and liability valuations is obtained. The fair values that remain preliminary include tax-related liabilities and contingent liabilities. Any material adjustments to the estimates based upon new information identified during the measurement period will be reflected as of the date of the acquisition.

The table below details the fair values of the assets acquired and the liabilities assumed at the acquisition date, including applicable measurement period adjustments:

(in thousands)
Accounts receivable	$	3,317
Inventories	90,428
Prepaids and other current assets	5,293
Property, plant and equipment	23,776
Goodwill	247,474
Identifiable intangible assets	157,500
Operating lease right-of-use assets	11,661
Other Assets	3,001
Accounts payable	(7,436)
Accrued compensation	(2,086)
Accrued customer rebates and returns	(1,609)
Other current liabilities	(8,726)
Long-term operating lease liabilities	(9,508)
Other long-term liabilities	(3,307)
Net cash consideration	$	509,778

The financial results of the Transaction have been included in the consolidated financial statements since the date of acquisition.

XML

Sales of Accounts Receivable	3 Months Ended
	Apr. 01, 2023
Receivables [Abstract]
Sales of Accounts Receivable	Sales of Accounts ReceivableWe have entered several customer-sponsored programs administered by unrelated financial institutions that permit us to sell (factor) certain accounts receivable at discounted rates to the financial institutions. Transactions under these agreements were accounted for as sales of accounts receivable and the related accounts receivable were removed from our Condensed Consolidated Balance Sheets at the times of the sales transactions. Under these agreements, we sold $237.7 million and $275.2 million of accounts receivable during the three months ended April 1, 2023 and March 26, 2022, respectively. Selling, general and administrative expenses include factoring costs associated with these accounts receivable sales programs of $13.5 million and $4.9 million during the three months ended April 1, 2023 and March 26, 2022, respectively. The increase in factoring costs for the three months ended April 1, 2023 compared to the prior year period was driven by higher interest rates during the three months ended April 1, 2023.

XML

Inventories

3 Months Ended

Apr. 01, 2023

Inventory Disclosure [Abstract]

Inventories

Inventories

Inventories include the cost of material, freight, direct labor and overhead utilized in the processing of our products and are stated at the lower of cost or net realizable value. Inventories were as follows:

(in thousands)	April 1, 2023		December 31, 2022
Raw materials	$	30,839	$	34,267
Bulk product	200,491		234,871
Finished product	446,544		478,032
Packaging materials	9,075		8,731
Total	$	686,949	$	755,901

XML

Goodwill and Intangible Assets

3 Months Ended

Apr. 01, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

Goodwill and Intangible Assets

Goodwill

Goodwill included the following:

(in thousands)
Balance at December 31, 2022	$	443,035
Measurement period adjustments for SuperATV acquisition	233
Foreign currency translation	68
Balance at April 1, 2023	$	443,336

Intangible Assets

Intangible assets included the following:

	April 1, 2023						December 31, 2022
Intangible assets subject to amortization	Gross Carrying Value		Accumulated Amortization		Net Carrying Value		Gross Carrying Value		Accumulated Amortization		Net Carrying Value
(in thousands)
Customer relationships	$	175,430	$	24,156	$	151,274	$	175,430	$	21,643	$	153,787
Trade names	67,690		7,469		60,221		67,690		6,370		61,320
Product Portfolio	107,800		4,644		103,156		107,800		2,953		104,847
Technology	2,167		882		1,285		2,167		820		1,347
Patents and Other	1,430		367		1,063		1,430		322		1,108
Total	$	354,517	$	37,518	$	316,999	$	354,517	$	32,108	$	322,409

Amortization expense was $5.5 million and $3.0 million during the three months ended April 1, 2023 and March 26, 2022, respectively.

XML

Debt	3 Months Ended
	Apr. 01, 2023
Debt Disclosure [Abstract]
Debt	DebtAs of April 1, 2023 and December 31, 2022, the weighted average interest rate on the outstanding borrowings under our credit facility was 6.41% and 5.78%, respectively.

XML

Commitments and Contingencies

3 Months Ended

Apr. 01, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Acquisitions

We have contingent consideration related to an acquisition due to the uncertainty of the ultimate amount of any payments that will become due as earnout payments if performance targets are achieved. If the remaining performance targets for the acquisition are fully achieved, the maximum additional contingent payments to be made under the transaction documents would be $100.0 million in aggregate.

As of April 1, 2023, we accrued $20.5 million, representing the fair value of the estimated payments that we expect could become due in connection with the transaction. For the three months ended April 1, 2023, we recorded a charge of $0.5 million of accretion on the estimated payment liability, with the charge included in selling, general and administrative expenses in the Condensed Consolidated Statements of Operations.

Other Contingencies

We are a party to or otherwise involved in legal proceedings that arise in the ordinary course of business, such as various claims and legal actions involving contracts, employment claims, competitive practices, intellectual property infringement, product liability claims and other matters arising out of the conduct of our business. In the opinion of management, none of the actions,

individually or in the aggregate, taking into account relevant insurance coverage, would likely have a material financial impact on the Company and we believe the range of reasonably possible losses from current matters, taking into account relevant insurance coverage, is immaterial. However, legal matters are subject to inherent uncertainties and there exists the possibility that the ultimate resolution of any of these matters could have a material adverse impact on the Company’s cash flows, financial position or results of operations in the period in which any such effects are recorded.

XML

Revenue Recognition

3 Months Ended

Apr. 01, 2023

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Revenue Recognition

The following tables present our disaggregated revenue by type of major good / product line, and geography.

	Three Months Ended
(in thousands)	April 1, 2023		March 26, 2022
Powertrain	$	171,035	$	152,228
Chassis	188,864		160,862
Motor Vehicle body	91,159		73,280
Hardware	15,680		15,209
Total	$	466,738	$	401,579

	Three Months Ended
(in thousands)	April 1, 2023		March 26, 2022
Net sales to U.S. customers	$	430,693	$	373,618
Net sales to non-U.S. customers	36,045		27,961
Total	$	466,738	$	401,579

XML

Stock-Based Compensation

3 Months Ended

Apr. 01, 2023

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

Stock-Based Compensation

Restricted Stock Awards (“RSAs”) and Restricted Stock Units (“RSUs”)

We issue RSAs and RSUs to participants in our equity plans in the form of time-based RSAs and RSUs and performance-based RSAs and RSUs.

Compensation cost related to RSA and RSU grants was $1.7 million and $1.6 million for the three months ended April 1, 2023 and March 26, 2022, respectively, and was included in selling, general and administrative expenses in the Condensed Consolidated Statements of Operations.

The following table summarizes our RSA and RSU activity for the three months ended April 1, 2023:

	Shares	Weighted Average Fair Value
Balance at December 31, 2022	238,922	$	92.07
Granted	93,944	$	98.02
Vested	(59,382)	$	77.02
Canceled	(8,392)	$	81.56
Balance at April 1, 2023	265,092	$	97.88

For the three months ended April 1, 2023, we granted 29,399 performance-based RSUs with a grant date fair value of $113.15 per share. For the three months ended March 26, 2022, we granted 23,995 performance-based RSUs with a grant date fair value of $111.31 per share.

As of April 1, 2023, there was $20.2 million of unrecognized compensation cost related to unvested RSA and RSU grants that is expected to be recognized over a weighted average period of 2.6 years.

Stock Options

We grant stock options to participants in our equity plans. Compensation cost related to stock option grants was $0.4 million for both the three months ended April 1, 2023 and March 26, 2022, and was included as selling, general and administrative expenses in the Condensed Consolidated Statements of Operations.

The following table summarizes our stock option activity for the three months ended April 1, 2023:

	Shares	Weighted Average Price		Weighted Average Remaining Term (years)	Aggregate Intrinsic Value  (in thousands)
Balance at December 31, 2022	268,119	$	84.03
Granted	76,784	$	91.28
Canceled	(1,113)	$	96.36
Exercised	(21,702)	$	72.85
Balance at April 1, 2023	322,088	$	86.47	6.1	$	1,935
Exercisable at April 1, 2023	133,913	$	80.31	5.0	$	1,398

As of April 1, 2023, there was $5.7 million of unrecognized compensation cost related to unvested stock options that is expected to be recognized over a weighted average period of 3.2 years.

XML

Earnings Per Share

3 Months Ended

Apr. 01, 2023

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

Basic earnings per share was calculated by dividing our net income by the weighted average number of common shares outstanding during the period, excluding unvested RSAs which are considered to be contingently issuable. To calculate diluted earnings per share, common share equivalents are added to the weighted average number of common shares outstanding. Common share equivalents are calculated using the treasury stock method and are computed based on outstanding stock-based awards.

For the three months ended April 1, 2023 and March 26, 2022, there were approximately 237,000 shares and 27,000 shares, respectively, that were excluded from the calculation of diluted earnings per share because their effect would have been anti-dilutive.

The following table sets forth the computation of basic earnings per share and diluted earnings per share:

	Three Months Ended
(in thousands, except per share data)	April 1, 2023		March 26, 2022
Net income	$	5,683	$	35,207
Denominator:
Weighted average basic shares outstanding	31,436		31,499
Effect of stock-based compensation awards	101		102
Weighted average diluted shares outstanding	31,537		31,601
Earnings Per Share:
Basic	$	0.18	$	1.12
Diluted	$	0.18	$	1.11

XML

Common Stock Repurchases

3 Months Ended

Apr. 01, 2023

Common Stock Repurchases [Abstract]

Common Stock Repurchases

Common Stock Repurchases

We periodically repurchase, at the then current market price, and cancel common stock issued to the Dorman Products, Inc. 401(k) Retirement Plan and Trust (the “401(k) Plan”). 401(k) Plan participants can no longer purchase shares of Dorman common stock as an investment option under the 401(k) Plan. Shares are generally purchased by the Company from the 401(k) Plan when participants sell units as permitted by the 401(k) Plan or elect to leave the 401(k) Plan upon retirement, termination or other reasons. The following table summarizes the repurchase and cancellation of common stock by the Company for the periods indicated:

	Three Months Ended
	April 1, 2023		March 26, 2022
Shares repurchased and canceled	5,125		12,764
Total cost of shares repurchased and canceled (in thousands)	$	434	$	1,388
Average price per share	$	84.62	$	108.74

Separately, our Board of Directors has authorized the repurchase of up to $600 million of our common stock through December 31, 2024 under a previously announced share repurchase program and subsequent authorizations. Under this program, share repurchases may be made from time to time depending on market conditions, share price, share availability and other factors at our discretion. The share repurchase program does not obligate us to acquire any specific number of shares. At April 1, 2023, $228.0 million was available for repurchase under this share repurchase program. The following table summarizes the repurchase and cancellation of common stock under the share repurchase program:

	Three Months Ended
	April 1, 2023		March 26, 2022
Shares repurchased and canceled	—		98,350
Total cost of shares repurchased and canceled (in thousands)	$	—	$	9,529
Average price per share	$	—	$	96.89

XML

Income Taxes	3 Months Ended
	Apr. 01, 2023
Income Tax Disclosure [Abstract]
Income Taxes	Income TaxesAt April 1, 2023, we had $3.4 million of net unrecognized tax benefits, all of which would lower our effective tax rate if recognized. We recognize interest and penalties related to uncertain tax positions in income tax expense. As of April 1, 2023, accrued interest and penalties related to uncertain tax positions were not material. We file income tax returns in the United States, Canada, China, India, and Mexico. The statute of limitations for tax years before 2019 is closed for U.S. federal income tax purposes. The statute of limitations for tax years before 2018 is closed for the states in which we file. The statute of limitations for tax years before 2019 is closed for income tax purposes in Canada, China, and India. The statute of limitations for tax years before 2017 is closed for income tax purposes in Mexico.

XML

Related-Party Transactions	3 Months Ended
	Apr. 01, 2023
Related Party Transactions [Abstract]
Related-Party Transactions	Related-Party TransactionsWe lease our Colmar, PA facility and a portion of our Lewisberry, PA facility from entities in which Steven L. Berman, our Non-Executive Chairman, and certain of his family members are owners. Each lease is a non-cancelable operating lease. Total rental payments to those entities under these lease arrangements will be $2.9 million in fiscal 2023 and were $2.5 million in fiscal 2022. The lease for our corporate headquarters in Colmar, PA was renewed in December 2022, effective as of January 1, 2023, and will expire on December 31, 2027. The lease for our Lewisberry, PA operating facility was signed in September 2020 and will expire on December 31, 2027.We are a partner in a joint venture with one of our suppliers and own a minority interest in two other suppliers. Two of these investments are accounted for under the equity method and one is accounted for under the cost method.

XML

Fair Value Disclosures	3 Months Ended
	Apr. 01, 2023
Fair Value Disclosures [Abstract]
Fair Value Disclosures	Fair Value DisclosuresThe carrying value of financial instruments such as cash and cash equivalents, accounts receivable, accounts payable, and other current assets and liabilities approximate their fair value based on the short-term nature of these instruments. The carrying value of borrowings under our credit facility approximates fair value because borrowings under our credit facility bear interest at rates indexed to a market rate (Term SOFR).

XML

Acquisitions (Tables)

3 Months Ended

Apr. 01, 2023

Business Combination and Asset Acquisition [Abstract]

Schedule of Estimated Fair Values of Assets Acquired and Liabilities Assumed

The table below details the fair values of the assets acquired and the liabilities assumed at the acquisition date, including applicable measurement period adjustments:

(in thousands)
Accounts receivable	$	3,317
Inventories	90,428
Prepaids and other current assets	5,293
Property, plant and equipment	23,776
Goodwill	247,474
Identifiable intangible assets	157,500
Operating lease right-of-use assets	11,661
Other Assets	3,001
Accounts payable	(7,436)
Accrued compensation	(2,086)
Accrued customer rebates and returns	(1,609)
Other current liabilities	(8,726)
Long-term operating lease liabilities	(9,508)
Other long-term liabilities	(3,307)
Net cash consideration	$	509,778

XML

Inventories (Tables)

3 Months Ended

Apr. 01, 2023

Inventory Disclosure [Abstract]

Summary of Inventories

Inventories include the cost of material, freight, direct labor and overhead utilized in the processing of our products and are stated at the lower of cost or net realizable value. Inventories were as follows:

(in thousands)	April 1, 2023		December 31, 2022
Raw materials	$	30,839	$	34,267
Bulk product	200,491		234,871
Finished product	446,544		478,032
Packaging materials	9,075		8,731
Total	$	686,949	$	755,901

XML

Goodwill and Intangible Assets (Tables)

3 Months Ended

Apr. 01, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill

Goodwill included the following:

(in thousands)
Balance at December 31, 2022	$	443,035
Measurement period adjustments for SuperATV acquisition	233
Foreign currency translation	68
Balance at April 1, 2023	$	443,336

Schedule of Intangible Assets

Intangible assets included the following:

	April 1, 2023						December 31, 2022
Intangible assets subject to amortization	Gross Carrying Value		Accumulated Amortization		Net Carrying Value		Gross Carrying Value		Accumulated Amortization		Net Carrying Value
(in thousands)
Customer relationships	$	175,430	$	24,156	$	151,274	$	175,430	$	21,643	$	153,787
Trade names	67,690		7,469		60,221		67,690		6,370		61,320
Product Portfolio	107,800		4,644		103,156		107,800		2,953		104,847
Technology	2,167		882		1,285		2,167		820		1,347
Patents and Other	1,430		367		1,063		1,430		322		1,108
Total	$	354,517	$	37,518	$	316,999	$	354,517	$	32,108	$	322,409

XML

Revenue Recognition (Tables)

3 Months Ended

Apr. 01, 2023

Revenue from Contract with Customer [Abstract]

Summary of Disaggregated Revenue

The following tables present our disaggregated revenue by type of major good / product line, and geography.

	Three Months Ended
(in thousands)	April 1, 2023		March 26, 2022
Powertrain	$	171,035	$	152,228
Chassis	188,864		160,862
Motor Vehicle body	91,159		73,280
Hardware	15,680		15,209
Total	$	466,738	$	401,579

	Three Months Ended
(in thousands)	April 1, 2023		March 26, 2022
Net sales to U.S. customers	$	430,693	$	373,618
Net sales to non-U.S. customers	36,045		27,961
Total	$	466,738	$	401,579

XML

Stock-Based Compensation (Tables)

3 Months Ended

Apr. 01, 2023

Share-Based Payment Arrangement [Abstract]

Summary of RSA and RSU Activity

The following table summarizes our RSA and RSU activity for the three months ended April 1, 2023:

	Shares	Weighted Average Fair Value
Balance at December 31, 2022	238,922	$	92.07
Granted	93,944	$	98.02
Vested	(59,382)	$	77.02
Canceled	(8,392)	$	81.56
Balance at April 1, 2023	265,092	$	97.88

Summary of Stock Option Activity

The following table summarizes our stock option activity for the three months ended April 1, 2023:

	Shares	Weighted Average Price		Weighted Average Remaining Term (years)	Aggregate Intrinsic Value  (in thousands)
Balance at December 31, 2022	268,119	$	84.03
Granted	76,784	$	91.28
Canceled	(1,113)	$	96.36
Exercised	(21,702)	$	72.85
Balance at April 1, 2023	322,088	$	86.47	6.1	$	1,935
Exercisable at April 1, 2023	133,913	$	80.31	5.0	$	1,398

XML

Earnings Per Share (Tables)

3 Months Ended

Apr. 01, 2023

Earnings Per Share [Abstract]

Schedule of Computation of Basic Earnings per Share and Diluted Earnings per Share

The following table sets forth the computation of basic earnings per share and diluted earnings per share:

	Three Months Ended
(in thousands, except per share data)	April 1, 2023		March 26, 2022
Net income	$	5,683	$	35,207
Denominator:
Weighted average basic shares outstanding	31,436		31,499
Effect of stock-based compensation awards	101		102
Weighted average diluted shares outstanding	31,537		31,601
Earnings Per Share:
Basic	$	0.18	$	1.12
Diluted	$	0.18	$	1.11

XML

Common Stock Repurchases (Tables)

3 Months Ended

Apr. 01, 2023

Common Stock Repurchases [Abstract]

Summary of Shares Repurchase and Cancellation

The following table summarizes the repurchase and cancellation of common stock by the Company for the periods indicated:

	Three Months Ended
	April 1, 2023		March 26, 2022
Shares repurchased and canceled	5,125		12,764
Total cost of shares repurchased and canceled (in thousands)	$	434	$	1,388
Average price per share	$	84.62	$	108.74

The following table summarizes the repurchase and cancellation of common stock under the share repurchase program:

	Three Months Ended
	April 1, 2023		March 26, 2022
Shares repurchased and canceled	—		98,350
Total cost of shares repurchased and canceled (in thousands)	$	—	$	9,529
Average price per share	$	—	$	96.89

XML

Acquisitions - Additional Information (Detail) - USD ($) $ in Thousands		3 Months Ended
	Oct. 04, 2022	Apr. 01, 2023	Mar. 26, 2022
Business Acquisition [Line Items]
Business acquisition, purchase price		$ (267)	$ (595)
Super ATV LLC
Business Acquisition [Line Items]
Business acquisition, percentage of outstanding stock acquired	100.00%
Business acquisition, purchase price	$ 509,800
Business acquisition, net of acquired cash	6,800
Potential earn-out payment	$ 100,000
Cash as proceeds		$ (300)

XML

Acquisitions - Schedule of Estimated Fair Values of Assets Acquired and Liabilities Assumed (Detail) - USD ($) $ in Thousands	Apr. 01, 2023	Dec. 31, 2022	Oct. 04, 2022
Business Acquisition [Line Items]
Goodwill	$ 443,336	$ 443,035
Super ATV LLC
Business Acquisition [Line Items]
Accounts receivable			$ 3,317
Inventories			90,428
Prepaids and other current assets			5,293
Property, plant and equipment			23,776
Goodwill			247,474
Identifiable intangible assets			157,500
Operating lease right-of-use assets			11,661
Other Assets			3,001
Accounts payable			(7,436)
Accrued compensation			(2,086)
Accrued customer rebates and returns			(1,609)
Other current liabilities			(8,726)
Long-term operating lease liabilities			(9,508)
Other long-term liabilities			(3,307)
Net cash consideration			$ 509,778

XML

Sales of Accounts Receivable - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended
	Apr. 01, 2023	Mar. 26, 2022
Sale Of Accounts Receivable [Line Items]
Sale of accounts receivable	$ 237,700	$ 275,200
Selling, general and administrative expenses	126,363	86,528
Accounts Receivable Sales Programs
Sale Of Accounts Receivable [Line Items]
Selling, general and administrative expenses	$ 13,500	$ 4,900

XML

Inventories - Summary of Inventories (Detail) - USD ($) $ in Thousands	Apr. 01, 2023	Dec. 31, 2022
Inventory Disclosure [Abstract]
Raw materials	$ 30,839	$ 34,267
Bulk product	200,491	234,871
Finished product	446,544	478,032
Packaging materials	9,075	8,731
Total	$ 686,949	$ 755,901

XML

Goodwill and Intangible Assets - Schedule of Goodwill (Detail) $ in Thousands	3 Months Ended
	Apr. 01, 2023 USD ($)
Goodwill [Roll Forward]
Balance at December 31, 2022	$ 443,035
Measurement period adjustments for SuperATV acquisition	233
Foreign currency translation	68
Balance at April 1, 2023	$ 443,336

XML

Goodwill and Intangible Assets - Schedule of Intangible Assets (Detail) - USD ($) $ in Thousands	Apr. 01, 2023	Dec. 31, 2022
Finite Lived Intangible Assets [Line Items]
Gross Carrying Value	$ 354,517	$ 354,517
Accumulated Amortization	37,518	32,108
Net Carrying Value	316,999	322,409
Customer relationships
Finite Lived Intangible Assets [Line Items]
Gross Carrying Value	175,430	175,430
Accumulated Amortization	24,156	21,643
Net Carrying Value	151,274	153,787
Trade names
Finite Lived Intangible Assets [Line Items]
Gross Carrying Value	67,690	67,690
Accumulated Amortization	7,469	6,370
Net Carrying Value	60,221	61,320
Product Portfolio
Finite Lived Intangible Assets [Line Items]
Gross Carrying Value	107,800	107,800
Accumulated Amortization	4,644	2,953
Net Carrying Value	103,156	104,847
Technology
Finite Lived Intangible Assets [Line Items]
Gross Carrying Value	2,167	2,167
Accumulated Amortization	882	820
Net Carrying Value	1,285	1,347
Patents and Other
Finite Lived Intangible Assets [Line Items]
Gross Carrying Value	1,430	1,430
Accumulated Amortization	367	322
Net Carrying Value	$ 1,063	$ 1,108

XML

Goodwill and Intangible Assets - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended
	Apr. 01, 2023	Mar. 26, 2022
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense	$ 5.5	$ 3.0

XML

Debt - Additional Information (Detail)	Apr. 01, 2023	Dec. 31, 2022
Revolving Credit Facility
Debt Instrument [Line Items]
Credit facility, outstanding borrowing interest rate	6.41%	5.78%

XML

Commitments and Contingencies - Additional Information (Detail) $ in Millions	3 Months Ended
	Apr. 01, 2023 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Maximum contingency payable	$ 100.0
Estimated contingent payments	20.5
Increase in contingent consideration accrual	$ 0.5

XML

Revenue Recognition - Summary of Disaggregated Revenue (Detail) - USD ($) $ in Thousands	3 Months Ended
	Apr. 01, 2023	Mar. 26, 2022
Disaggregation Of Revenue [Line Items]
Total	$ 466,738	$ 401,579
Net sales to U.S. customers
Disaggregation Of Revenue [Line Items]
Total	430,693	373,618
Net sales to non-U.S. customers
Disaggregation Of Revenue [Line Items]
Total	36,045	27,961
Powertrain
Disaggregation Of Revenue [Line Items]
Total	171,035	152,228
Chassis
Disaggregation Of Revenue [Line Items]
Total	188,864	160,862
Motor Vehicle body
Disaggregation Of Revenue [Line Items]
Total	91,159	73,280
Hardware
Disaggregation Of Revenue [Line Items]
Total	$ 15,680	$ 15,209

XML

Stock-Based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Apr. 01, 2023	Mar. 26, 2022
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Granted (in shares)	93,944
Weighted-average grant-date fair value (in dollars per share)	$ 98.02
Compensation cost related to stock options	$ 400	$ 400
RSA and RSU
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Compensation cost related to restricted stock	1,700	$ 1,600
Unrecognized compensation cost related to non-vested restricted stock	$ 20,200
Unrecognized compensation cost related to non-vested restricted stock, weighted-average period	2 years 7 months 6 days
Performance-Based Restricted Stock Units
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Granted (in shares)	29,399	23,995
Weighted-average grant-date fair value (in dollars per share)	$ 113.15	$ 111.31
Share-Based Payment Arrangement, Option
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unrecognized compensation cost related to non-vested restricted stock	$ 5,700
Unrecognized compensation cost related to non-vested restricted stock, weighted-average period	3 years 2 months 12 days

XML

Stock-Based Compensation - Summary of RSA and RSU Activity (Detail)	3 Months Ended
	Apr. 01, 2023 $ / shares shares
Shares
Beginning balance (in shares) | shares	238,922
Granted (in shares) | shares	93,944
Vested (in shares) | shares	(59,382)
Canceled (in shares) | shares	(8,392)
Ending balance (in shares) | shares	265,092
Weighted Average Fair Value
Beginning balance, weighted average fair value (in dollars per share) | $ / shares	$ 92.07
Granted (in dollars per share) | $ / shares	98.02
Vested (in dollars per share) | $ / shares	77.02
Canceled (in dollars per share) | $ / shares	81.56
Ending balance, weighted average fair value (in dollars per share) | $ / shares	$ 97.88

XML

Stock-Based Compensation - Summary of Stock Option Activity (Detail) $ / shares in Units, $ in Thousands	3 Months Ended
	Apr. 01, 2023 USD ($) $ / shares shares
Shares
Beginning balance (in shares) | shares	268,119
Granted (in shares) | shares	76,784
Canceled (in shares) | shares	(1,113)
Exercised (in shares) | shares	(21,702)
Ending balance (in shares) | shares	322,088
Exercisable (in shares) | shares	133,913
Weighted Average Fair Value
Beginning balance, weighted average exercise price (in dollars per share) | $ / shares	$ 84.03
Granted (in dollars per share) | $ / shares	91.28
Canceled (in dollars per share) | $ / shares	96.36
Exercised (in dollars per share) | $ / shares	72.85
Ending balance, weighted average exercise price (in dollars per share) | $ / shares	86.47
Exercisable (in dollars per share) | $ / shares	$ 80.31
Weighted average remaining term	6 years 1 month 6 days
Weighted average remaining term, exercisable	5 years
Aggregate intrinsic value | $	$ 1,935
Aggregate intrinsic value, exercisable | $	$ 1,398

XML

Earnings Per Share - Additional Information (Detail) - shares	3 Months Ended
	Apr. 01, 2023	Mar. 26, 2022
Earnings Per Share [Abstract]
Stock-based awards considered as anti-dilutive	237,000	27,000

XML

Earnings Per Share - Schedule of Computation of Basic Earnings per Share and Diluted Earnings per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Apr. 01, 2023	Mar. 26, 2022
Earnings Per Share [Abstract]
Net income	$ 5,683	$ 35,207
Denominator:
Weighted average shares outstanding, basic (in shares)	31,436	31,499
Effect of stock-based compensation awards (in shares)	101	102
Weighted average shares outstanding, diluted (in shares)	31,537	31,601
Earnings Per Share:
Earning per share, basic (in dollars per share)	$ 0.18	$ 1.12
Earning per share, diluted (in dollars per share)	$ 0.18	$ 1.11

XML

Common Stock Repurchases - Summary of Shares Repurchase and Cancellation (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Apr. 01, 2023	Mar. 26, 2022
Common Stock Repurchases
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares repurchased and canceled (in shares)	5,125	12,764
Total cost of shares repurchased and canceled (in thousands)	$ 434	$ 1,388
Average price per share (in dollars per share)	$ 84.62	$ 108.74
Share Repurchase Program
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares repurchased and canceled (in shares)	0	98,350
Total cost of shares repurchased and canceled (in thousands)	$ 0	$ 9,529
Average price per share (in dollars per share)	$ 0	$ 96.89

XML

Common Stock Repurchases - Additional Information (Detail) - Share Repurchase Program	Apr. 01, 2023 USD ($)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share repurchase program shares authorized to be repurchased (in shares)	$ 600,000,000
Shares available for repurchase under share repurchase program amount	$ 228,000,000

XML

Income Taxes - Additional Information (Detail) $ in Millions	Apr. 01, 2023 USD ($)
Income Tax Disclosure [Abstract]
Net unrecognized tax benefits	$ 3.4

XML

Related-Party Transactions - Additional Information (Detail) $ in Millions	3 Months Ended	6 Months Ended	12 Months Ended
	Apr. 01, 2023 Investment Supplier	Jul. 01, 2023 USD ($)	Dec. 31, 2022 USD ($)
Related Party Transaction [Line Items]
Rental payments based upon the terms of the lease | $			$ 2.5
Joint Venture
Related Party Transaction [Line Items]
Number of suppliers with company partners Joint Venture | Supplier	1
Minority interest investments in number of suppliers | Supplier	2
Number of investments accounted for under equity method | Investment	2
Number of investments accounted for under cost method | Investment	1
Scenario, Forecast
Related Party Transaction [Line Items]
Rental payments based upon the terms of the lease | $		$ 2.9