SOURCE: Dorman Products, Inc.

Dorman Products, Inc.

February 23, 2010 06:00 ET

Dorman Products, Inc. Reports Sales and Earnings for the Fourth Quarter and Year Ended December 26, 2009

COLMAR, PA--(Marketwire - February 23, 2010) - Dorman Products, Inc. (NASDAQ: DORM) today announced financial results for the fourth quarter ended December 26, 2009.

Revenues for the three months ended December 26, 2009 increased 20% over the prior year to $96.7 million from $80.7 million last year. For the year ended December 26, 2009, revenues were up 10% to $377.4 million from $342.3 million. Revenue growth in both periods was driven by strong overall demand for our products and higher new product sales.

Reported net income in the fourth quarter of 2009 was up 57% to $7.7 million from $4.9 million in the same period last year. Reported diluted earnings per share in the fourth quarter of 2009 rose 59% to $0.43 from $0.27 in the same period last year. Excluding the impact of the one-time item shown in the reconciliation of non-GAAP measures below, net income in the fourth quarter of 2009 was up 83% to $7.7 million from $4.2 million in the same period last year and diluted EPS in the fourth quarter of 2009 increased 87% to $0.43 from $0.23 in the same period last year.

Reported net income for the year ended December 26, 2009 was up 49% to $26.5 million from $17.8 million in the same period last year. Reported diluted earnings per share for the year ended December 26, 2009 were up 48% to $1.47 from $0.99 last year. Excluding the impact of the one-time item shown in the reconciliation of non-GAAP measures below, net income in 2009 was up 55% to $26.5 million from $17.1 million in the same period last year and diluted EPS in 2009 increased 55% to $1.47 from $0.95 in the same period last year.

For the year ended December 26, 2009 and December 27, 2008:

--  Gross profit margin was 34.9% in 2009 compared to 32.2% in 2008. The
    increase in margin is the result of lower warranty and product return
    costs along with a reduction in freight expenses and certain material
    costs.
--  Selling, general and administrative expenses increased 7.7% in 2009 to
    $88.1 million from $81.8 million in 2008, but was down as a percentage
    of sales from 23.9% in 2008 to 23.3% in 2009.  The spending increase
    was the result of higher variable costs related to our sales increase
    as well as increased new product development spending and higher
    incentive compensation expense due to higher earnings levels.
--  Interest expense, net, decreased to $0.3 million in 2009 from $0.9
    million in 2008 due to lower borrowing levels and interest rates.
--  Our effective tax rate increased to 38.8% from 35.2% in the prior year.
    The increase is the result of a $0.7 million tax benefit realized in
    2008 upon the disposition of our Canadian Subsidiary and higher
    provisions for state income taxes in 2009.
--  Operating cash flow for 2009 increased $17.9 million to $27.6 million
    from $9.7 million in 2008.  The increased cash flow enabled us to
    decrease total debt by $15.1 million during 2009.  Total debt
    outstanding as of December 26, 2009 was only $0.4 million.

Mr. Richard Berman, Chairman and Chief Executive Officer, said, "Revenue growth in 2009 was just over 10% and was driven primarily by continued strong acceptance and market penetration of our new product lines and line extensions. Our 2010 plan provides for further investment in our new product capabilities. We look forward to sharing the new products generated by these investments with our customers and end users as the year progresses."

Dorman Products, Inc. is a leading supplier of OE Dealer "Exclusive" automotive replacement parts, automotive hardware, brake products and household hardware to the Automotive Aftermarket and Mass Merchandise markets. Dorman products are marketed under the Dorman®, OE Solutions™, HELP!®, AutoGrade™, First Stop™, Conduct-Tite®, Symmetry® and Scan-Tech® brand names.

Forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. Readers are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date hereof. Factors that could cause actual results to differ materially include, but are not limited to, those factors discussed in the Company's 2008 Annual Report on Form 10-K under Item 1A - Risk Factors.



                      DORMAN PRODUCTS, INC. AND SUBSIDIARIES
                      Consolidated Statements of Operations
                     (in thousands, except per-share amounts)

                                          13 Weeks           13 Weeks
                                          --------           --------
Fourth Quarter (unaudited)            12/26/09   Pct.    12/27/08   Pct.
                                      -------- --------  -------- --------

Net sales                             $ 96,698    100.0  $ 80,687    100.0
Cost of goods sold                      60,634     62.7    54,875     68.0
Gross profit                            36,064     37.3    25,812     32.0
Selling, general and
 administrative expenses                23,114     23.9    19,318     24.0
Income from operations                  12,950     13.4     6,494      8.0
Interest expense, net                      139      0.2       146      0.1
Income before income taxes              12,811     13.2     6,348      7.9
Provision for income taxes               5,074      5.2     1,498      1.9
Net income                            $  7,737      8.0  $  4,850      6.0
Earnings per share
   Basic                               $  0.44        -   $  0.27        -
   Diluted                             $  0.43        -   $  0.27        -
Average shares outstanding
   Basic                                17,683        -    17,649        -
   Diluted                              18,024        -    18,018        -


                                          52 Weeks           52 Weeks
                                          --------           --------
Year to Date (unaudited)              12/26/09   Pct.    12/27/08   Pct.
                                      -------- --------  -------- --------
Net sales                             $377,378    100.0  $342,325    100.0
Cost of goods sold                     245,592     65.1   232,140     67.8
Gross profit                           131,786     34.9   110,185     32.2
Selling, general and
 administrative expenses                88,117     23.3    81,781     23.9
Income from operations                  43,669     11.6    28,404      8.3
Interest expense, net                      343      0.1       920      0.3
Income before income taxes              43,326     11.5    27,484      8.0
Provision for income taxes              16,831      4.5     9,671      2.8
Net income                            $ 26,495      7.0  $ 17,813      5.2
Earnings per share
  Basic                               $   1.50        -  $   1.01        -
  Diluted                             $   1.47        -  $   0.99        -
Average shares outstanding
  Basic                                 17,658        -    17,675        -
  Diluted                               17,996        -    18,049        -




                      DORMAN PRODUCTS, INC. AND SUBSIDIARIES
                      Condensed Consolidated Balance Sheets
                                  (Unaudited)
                                (in thousands)

                                               12/26/09         12/27/08
                                              ---------        ---------
Assets:
Cash and cash equivalents                     $  10,626          $   5,824
Accounts receivable                              88,164             77,101
Inventories                                      89,927             93,577
Deferred income taxes                            12,620             11,626
Prepaid expenses                                  2,248              2,135
Total current assets                            203,585            190,263
Property & equipment                             25,218             25,053
Goodwill                                         26,553             26,553
Other assets                                      2,046              1,553
Total assets                                  $ 257,402          $ 243,422

Liability & Shareholders' Equity:
Current portion of long-term debt             $      90          $      86
Accounts payable                                 16,098             21,900
Accrued expenses and other                       14,244              8,040
Total current liabilities                        30,432             30,026
Long-term debt and other                          2,941             17,464
Deferred income taxes                             8,694              8,088
Shareholders' equity                            215,335            187,844
Total Liabilities and Equity                  $ 257,402          $ 243,422


Selected Cash Flow Information:
(in thousands)                   13 Weeks (unaudited)  52 Weeks (unaudited)
                                 --------------------  --------------------
                                 12/26/09    12/27/08  12/26/09    12/27/08

Depreciation and amortization      $2,061      $1,965    $7,835      $7,672
Capital Expenditures               $1,904      $1,531    $7,830      $7,323




                      DORMAN PRODUCTS, INC. AND SUBSIDIARIES
                       Reconciliation of Non-GAAP Measures
                     (in thousands, except per-share amounts)

This press release contains non-GAAP measures which adjust net income and diluted earnings per share to exclude the impact of the following one-time items:

--  Results for the thirteen weeks and year ended December 27, 2008
    include a $0.7 million tax benefit realized upon the disposition
    of our Canadian subsidiary.

The presentation of these non-GAAP measures is intended to enhance the usefulness of the financial information by providing measures which the Company's management uses internally to evaluate the Company's baseline performance. A reconciliation of net income and diluted earnings per share follows:

                                                  13 Weeks (unaudited)
                                              ---------------------------
                                               12/26/09 12/27/08 % Change

Net income, as reported                       $   7,737 $  4,850     59.5%

   Less: Tax benefit upon diposition of
    subsidiary                                        -     (673)     N/A

                                              --------- -------- --------
Net income, as adjusted                       $   7,737 $  4,177     85.2%
                                              ========= ======== ========

Diluted EPS, as reported                      $    0.43 $   0.27     59.3%

   Less: Tax benefit upon diposition of
    subsidiary                                        -    (0.04)     N/A

                                              --------- -------- --------
Diluted EPS, as adjusted                      $    0.43 $   0.23     87.0%
                                              ========= ======== ========

                                                  52 Weeks (unaudited)
                                              ---------------------------
                                               12/26/09 12/27/08 % Change

Net income, as reported                       $  26,495 $ 17,813     48.7%

   Less: Tax benefit upon diposition of
    subsidiary                                        -     (673)     N/A

                                              --------- -------- --------
Net income, as adjusted                       $  26,495 $ 17,140     54.6%
                                              ========= ======== ========

Diluted EPS, as reported                      $    1.47 $   0.99     48.5%

   Less: Tax benefit upon diposition of
    subsidiary                                        -    (0.04)     N/A

                                              --------- -------- --------
Diluted EPS, as adjusted                      $    1.47 $   0.95     54.7%
                                              ========= ======== ========