SOURCE: Dorman Products, Inc.

Dorman Products, Inc.

October 24, 2016 07:00 ET

Dorman Products, Inc. Reports Sales and Earnings for the Third Quarter Ended September 24, 2016

COLMAR, PA--(Marketwired - Oct 24, 2016) - Dorman Products, Inc. (NASDAQ: DORM

  • Q3 sales increased 1% to $212.8 million

  • Q3 EPS increased 5% to $0.77 per diluted share

  • Year to date 2016 sales and EPS increase of 5% and 13%, respectively. 

Dorman Products, Inc. (NASDAQ: DORM) today announced sales for the third quarter ended September 24, 2016 of $212.8 million, an increase of 1% from $210.9 million in the third quarter of 2015. Diluted earnings per share for the third quarter ended September 24, 2016 increased 5% to $0.77 per share from $0.73 per share in the third quarter of 2015.

"Customer sell through rates stabilized in the quarter and were basically at the same rates that we saw in the second quarter. Our third quarter 2015 results included a significant benefit from stocking orders from a major customer, and as result, our 2016 third quarter sales growth was just 1%. We expect the unfavorable impact of the strong stocking order comparisons in the third quarter to reverse in the fourth quarter. We continue to expect full year 2016 sales growth to be in the 6% to 7% range and we also expect reported 2016 EPS growth to be in the mid-teens range," said Matt Barton, President and Chief Executive Officer. 

Gross profit margin for the third quarter of 2016 was 39.1% compared to 38.3% in the third quarter of 2015 primarily due to favorable mix and a reduced excess and obsolete provision as inventory reduction initiatives have continued to gain traction. SG&A expenses increased 5% in the third quarter of 2016 to $41.5 million from $39.6 million in the third quarter of 2015.

 For the nine months ended September 24, 2016, sales increased 5% over the prior year to $630.5 million from $598.1 million last year. Diluted earnings per share in 2016 rose 13% to $2.23 from $1.98 in the prior year. Operating cash flow for the nine months ended September 24, 2016 was $55.5 million compared to $57.5 million in the first nine months of 2015. 

 "We continue to be very optimistic about our future growth potential. During the quarter, we introduced 977 new product SKUs and we were also awarded significant new Chassis business from a major customer which will begin shipping late in the fourth quarter of 2016. As we look forward to 2017, we expect to deliver organic revenue and net income growth in the mid to high single digit range," continued Mr. Barton. "We are continuing to invest in our new product development capabilities that will provide additional growth opportunities for both Dorman and our customers."

The Company did not repurchase any of its common stock in the quarter and has $57.8 million remaining under its current $150 million share repurchase program.

Dorman Products, Inc. is a leading supplier of 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®, TECHoice™, Dorman® Hybrid Drive Batteries and Dorman HD Solutions™ brand names. 

This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including statements related to the Company's future growth rates. Words such as "believe," "demonstrate," "expect," "estimate," "forecast," "anticipate," "should" and "likely" and similar expressions identify forward-looking statements. In addition, statements that are not historical should also be considered forward-looking statements. Readers are cautioned not to place undue reliance on those forward-looking statements, which speak only as of the date the statement was made. Such forward-looking statements are based on current expectations that involve a number of known and unknown risks, uncertainties and other factors which may cause actual events to be materially different from those expressed or implied by such forward-looking statements. These factors include, but are not limited to, competition in the automotive aftermarket industry, concentration of the Company's sales and accounts receivable among a small number of customers, the impact of consolidation in the automotive aftermarket industry, foreign currency fluctuations, dependence on senior management and other risks detailed in the Company's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended December 26, 2015. The Company is under no obligation to (and expressly disclaims any such obligation to) update any of the information in this press release if any forward-looking statement later turns out to be inaccurate whether as a result of new information, future events or otherwise.

               
DORMAN PRODUCTS, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(in thousands, except per-share amounts)
               
  13 Weeks   13 Weeks
Third Quarter (unaudited) 9/24/16   Pct.   9/26/15   Pct.
Net sales $ 212,786     100.0   $ 210,928   100.0
Cost of goods sold   129,641     60.9     130,134   61.7
Gross profit   83,145     39.1     80,794   38.3
Selling, general and administrative expenses   41,512     19.5     39,554   18.7
Income from operations   41,633     19.6     41,240   19.6
Interest expense, net   61     0.1     48   0.1
Income before income taxes   41,572     19.5     41,192   19.5
Provision for income taxes   14,877     7.0     15,132   7.1
Net income $ 26,695     12.5   $ 26,060   12.4
                     
Diluted earnings per share $ 0.77         $ 0.73    
                     
Weighted average diluted shares outstanding   34,672           35,575    
                     
                     
                     
DORMAN PRODUCTS, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(in thousands, except per-share amounts)
               
  39 Weeks   39 Weeks
Third Quarter (unaudited) 9/24/16   Pct.   9/26/15   Pct.
Net sales $ 630,507     100.0   $ 598,123   100.0
Cost of goods sold   384,604     61.0     367,866   61.5
Gross profit   245,903     39.0     230,257   38.5
Selling, general and administrative expenses   124,350     19.7     118,470   19.8
Income from operations   121,553     19.3     111,787   18.7
Interest expense, net   180     0.0     152   0.0
Income before income taxes   121,373     19.3     111,635   18.7
Provision for income taxes   44,025     7.0     41,093   6.9
Net income $ 77,348     12.3   $ 70,542   11.8
                     
Diluted earnings per share $ 2.23         $ 1.98    
                     
Weighted average diluted shares outstanding   34,626           35,611    
                     
                     
                     
DORMAN PRODUCTS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
(in thousands)
       
  9/24/16   12/26/15
Assets:          
Cash and cash equivalents $ 95,142   $ 78,659
Accounts receivable   245,006     203,923
Inventories   168,245     193,725
Prepaids and other current assets   4,259     2,326
Total current assets   512,652     478,633
Property, plant & equipment, net   88,384     87,046
Goodwill and other intangible assets, net   29,814     29,889
Deferred income taxes, net   7,581     7,557
Other assets   29,574     18,740
Total assets $ 668,005   $ 621,865
           
Liabilities & shareholders' equity:          
Accounts payable $ 52,481   $ 63,967
Accrued expenses and other   30,824     34,603
Total current liabilities   83,305     98,570
Other long-term liabilities   5,536     5,259
Shareholders' equity   579,164     518,036
Total liabilities and equity $ 668,005   $ 621,865
           
           
           
Selected Cash Flow Information:                
(in thousands)   13 Weeks (unaudited)   39 Weeks (unaudited)
    9/24/16   9/26/15   9/24/16   9/26/15
Depreciation, amortization and accretion   $ 4,711   $ 4,143   $ 13,890   $ 11,739
Capital expenditures   $ 4,772   $ 5,518   $ 14,890   $ 16,534
                         

Visit our website at www.dormanproducts.com