COLMAR, PA -- (MARKET WIRE) -- February 23, 2007 -- Dorman Products, Inc. (
NASDAQ:
DORM) (formerly
R&B, Inc. NASDAQ: RBIN) today announced financial results for the fourth
quarter and year ended December 30, 2006. The Company operates on a
fifty-two, fifty-three week period ending on the last Saturday of the
calendar year. As a result, fourth quarter 2005 results are for 14 weeks
and fiscal 2005 includes 53 weeks while the current year results are for 13
and 52 weeks, respectively.
Sales increased 5% to $77.9 million for the fourth quarter ended December
30, 2006 from $74.5 million in the same period last year despite one less
selling week in the current year. Sales for the year ended December 30,
2006 increased 6% to $295.8 million from $278.1 million in the same period
last year. Revenue growth was driven primarily by increased sales from new
products.
Net income in the fourth quarter of 2006 was $4.9 million compared to net
income of $4.4 million in the same period last year. Diluted earnings per
share in the fourth quarter increased 13% to $0.27 from $0.24 in the same
period last year.
Results for the year ended December 30, 2006 include a one-time $3.2
million non-cash write-down for goodwill impairment ($2.9 million or $0.16
per share) and the write off of deferred tax benefits ($0.3 million or
$0.02 per share) associated with the Company's Swedish subsidiary
(Scan-Tech). The charges, which are not tax deductible, were the result of
a second quarter review of the Scan-Tech business in response to bad debt
charge offs at two large customers and the resulting loss of those
customers in the first half of the year.
Excluding the goodwill impairment and deferred tax write off, net income
for the year was $17.0 million compared to net income of $17.1 million last
year and fully diluted EPS for the year were $0.94 compared to $0.93 last
year. Reported net income for the year ended December 30, 2006 was $13.8
million compared to net income of $17.1 million in the same period last
year. Reported diluted earnings per share for the year ended December 30,
2006 decreased to $0.76 from $0.93 in the same period last year.
Effective January 1, 2006, the Company adopted SFAS No. 123R, "Share-Based
Payment" and related interpretations and began expensing the grant date
fair value of employee stock options. Prior to January 1, 2006, the
Company applied Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees," and related interpretations in accounting for
its stock option plans. Accordingly, no compensation expense was
recognized in net income for employee stock options in the prior year. The
Company adopted SFAS No. 123R using the modified prospective transition
method and therefore has not restated prior periods. The impact of
adopting SFAS No. 123R in 2006 reduced diluted earnings per share for the
year by $0.02.
Mr. Richard Berman, Chairman, President and Chief Executive Officer said,
"Stronger fourth quarter orders resulted in solid revenue growth after
adjusting for last year's 14-week quarter. The higher sales level enabled
us to better leverage our expenses, which is necessary to offset the impact
that a shifting mix to higher priced but lower margin hard parts has on
reducing our gross margin. We remain committed to making the right
investments to ensure new product leadership in all of our markets. Dorman
will continue to be the leader in new product development for the
automotive aftermarket."
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 automotive parts and hardware are marketed under the OE
Solutions, HELP!®, AutoGrade, First Stop, Conduct-Tite®, Pik-A-Nut® 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 cause actual results to differ materially include, but are not
limited to, those factors discussed in the Company's 2005 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 14 Weeks
---------------- ----------------
Fourth Quarter (unaudited) 12/30/06 Pct. 12/31/05 Pct.
Net sales $ 77,882 100.0 $ 74,492 100.0
Cost of goods sold 51,958 66.7 49,042 65.8
Gross profit 25,924 33.3 25,450 34.2
Selling, general and
administrative expenses 17,448 22.4 17,771 23.9
Income from operations 8,476 10.9 7,679 10.3
Interest expense, net 470 0.6 654 0.9
Income before income taxes 8,006 10.3 7,025 9.4
Provision for income taxes 3,092 4.0 2,643 3.5
Net income $ 4,914 6.3 $ 4,382 5.9
Earnings per share
Basic $ 0.28 - $ 0.24 -
Diluted $ 0.27 - $ 0.24 -
Average shares outstanding
Basic 17,704 - 17,913 -
Diluted 18,113 - 18,394 -
52 Weeks 53 Weeks
---------------- ----------------
Year-to-Date 12/30/06 Pct. 12/31/05 Pct.
Net sales $295,825 100.0 $278,117 100.0
Cost of goods sold 192,348 65.0 179,253 64.5
Gross profit 103,447 35.0 98,864 35.5
Selling, general and
administrative expenses 73,810 25.0 69,088 24.8
Goodwill impairment 2,897 1.0 - -
Income from operations 26,770 9.0 29,776 10.7
Interest expense, net 2,267 0.7 2,615 0.9
Income before income taxes 24,503 8.3 27,161 9.8
Provision for income taxes 10,704 3.6 10,084 3.7
Net income $ 13,799 4.7 $ 17,077 6.1
Earnings per share
Basic $ 0.78 - $ 0.95 -
Diluted $ 0.76 - $ 0.93 -
Average shares outstanding
Basic 17,722 - 17,914 -
Diluted 18,139 - 18,437 -
DORMAN PRODUCTS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands)
12/30/06 12/31/05
Assets:
Cash and cash equivalents $ 5,080 $ 2,944
Accounts receivable 77,187 64,778
Inventories 67,768 75,535
Deferred income taxes 10,330 9,560
Prepaid expenses 1,443 1,545
Total current assets 161,808 154,362
Property & equipment 27,963 27,473
Goodwill 26,958 29,617
Other assets 1,029 704
Total assets $217,758 $212,156
Liability & Shareholders' Equity:
Current portion of long-term debt $ 8,651 $ 8,571
Accounts payable 12,822 14,739
Accrued expenses and other 13,531 15,240
Total current liabilities 35,004 38,550
Long-term debt and other 20,596 27,869
Deferred income taxes 8,315 7,195
Shareholders' equity 153,843 138,542
Total Liabilities and Equity $217,758 $212,156
Selected Cash Flow Information:
(in thousands) Quarter Ended
(unaudited) Year Ended
------------------- -------------------
12/30/06 12/31/05 12/30/06 12/31/05
Depreciation and
amortization $ 1,812 $ 1,580 $ 6,824 $ 5,774
Capital Expenditures $ 1,846 $ 1,698 $ 7,278 $ 7,220
DORMAN PRODUCTS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Measures
(in thousands, except per-share amounts)
During the second quarter of 2006 the Company recorded a $3.2 million
non-cash write-down for goodwill impairment ($2.9 million) and the write
off of deferred tax benefits ($0.3 million) associated with the Company's
Swedish operation (Scan-Tech). This press release contains non-GAAP
measures which adjust current year net income and fully diluted earnings
per share to exclude the impact of these charges. 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 fully diluted earnings per share follows:
Year
Ended
--------- --------- --------
12/31/06 12/31/05 % Change
Net income, as reported $ 13,799 $ 17,077 -19.2%
Add: Goodwill and asset impairment charge 3,216 - N/A
--------- --------- --------
Net income, as adjusted $ 17,015 $ 17,077 -0.4%
========= ========= ========
Fully diluted EPS, as reported $ 0.76 $ 0.93 -18.3%
Add: Goodwill and asset impairment charge 0.18 - N/A
--------- --------- --------
Fully diluted EPS, as adjusted $ 0.94 $ 0.93 1.1%
========= ========= ========
Contact Information:
Corporate Headquarters:
Dorman Products, Inc.
3400 East Walnut Street
Colmar, Pennsylvania 18915
Fax: (215) 997-8577
For Further Information Contact:
Mathias J. Barton, CFO
(215) 997-1800 x 5132
E-mail: Email Contact
Visit our Home Page:
www.dormanproducts.com