SOURCE: Dorman Products, Inc.

October 26, 2010 06:00 ET

Dorman Products, Inc. Reports Sales and Earnings for the Third Quarter Ended September 25, 2010 and Announces Expansion of Warsaw, KY Facility

COLMAR, PA--(Marketwire - October 26, 2010) - Dorman Products, Inc. (NASDAQ: DORM) today announced financial results for the third quarter ended September 25, 2010.

Revenues for the three months ended September 25, 2010 increased 22% over the prior year to $119.2 million from $98.0 million last year. Net income in the third quarter of 2010 was up 60% to $12.8 million from $8.0 million in the same period last year. Diluted earnings per share rose 61% in the third quarter of 2010 to $0.71 from $0.44 last year.

For the thirty-nine weeks ended September 25, 2010 and September 26, 2009:


--  Revenues in 2010 increased 18.7% over the prior year to $333.2 million
    from $280.7 million last year.  Revenue growth was driven by strong
    overall demand for our products and higher new product sales.
--  Net income in 2010 was up 80% to $33.9 million from $18.8 million last
    year.  Diluted earnings per share in 2010 rose 80% to $1.87 from $1.04
    in 2009.
--  Gross profit margin was 37.9% in 2010 compared to 34.1% in 2009. The
    increase in margin is the result of a reduction in freight expenses and
    certain material costs, along with lower product return costs.
--  Selling, general and administrative expenses increased 9.1% in 2010 to
    $70.9 million from $65.0 million in 2009, but were down as a percentage
    of sales from 23.2% in 2009 to 21.3% in 2010.  The spending increase
    was the result of higher variable costs related to our sales increase,
    increased new product development spending and higher incentive
    compensation expense due to higher earnings levels.  These increases
    were partially offset by lower operating expenses in most areas due to
    cost reduction initiatives.
--  Our effective tax rate remained constant at 38.5%.
--  Operating cash flow for 2010 was $14.9 million compared to $14.5
    million in 2009.

Mr. Richard Berman, Chairman and Chief Executive Officer, said, "Our customers' success with our New to the Aftermarket products continues to drive Dorman's sales growth. We continue to make further investments in our new product development capabilities as we believe the opportunities for further growth are significant. As a result, we are planning on having the largest number of new product releases in our history in 2011, for both new and existing product lines. These investments along with the publication and distribution of our tri-annual Dorman Stocking Guide and our monthly new product alert program will help further support Dorman's leadership position in delivering new products and revenue growth to the Aftermarket."

We have begun an expansion of our Warsaw, Kentucky distribution facility to provide additional capacity to support current and projected future growth of the business. The addition and related equipment, which will cost approximately $9 million, will add approximately 175,000 square feet of warehouse space and is expected to be completed in the spring of 2011.

Mr. Steven Berman, President and Chief Operating Officer of Dorman Products, Inc., commented, "We are excited about the opportunity this expansion provides us to more effectively serve the needs of our customers in the automotive aftermarket. We continue to invest in the development and distribution of new products for our customers and the expansion of our Warsaw Distribution Center directly supports this objective."

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 2009 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
                          -------------------          --------------------
Third Quarter (unaudited)  9/25/10      Pct.            9/26/09       Pct.
Net sales                 $ 119,212     100.0          $  98,007      100.0
Cost of goods sold           74,088      62.1             62,710       64.0
Gross profit                 45,124      37.9             35,297       36.0
Selling, general and
 administrative expenses     24,628      20.7             22,318       22.8
Income from operations       20,496      17.2             12,979       13.2
Interest expense, net            57       0.1                 52          -
Income before income
 taxes                       20,439      17.1             12,927       13.2
Provision for income
 taxes                        7,622       6.3              4,994        5.1
Net income                $  12,817      10.8          $   7,993        8.1
Earnings per share
  Basic                   $    0.72         -          $    0.45          -
  Diluted                 $    0.71         -          $    0.44          -
Average shares
 outstanding
  Basic                      17,800         -             17,657          -
  Diluted                    18,176         -             17,998          -





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

                                39 Weeks                     39 Weeks
                          -------------------          --------------------
Third Quarter (unaudited)  9/25/10      Pct.            9/26/09       Pct.
Net sales                 $ 333,196     100.0          $ 280,680      100.0
Cost of goods sold          206,967      62.1            184,958       65.9
Gross profit                126,229      37.9             95,722       34.1
Selling, general and
 administrative expenses     70,936      21.3             65,003       23.2
Income from operations       55,293      16.6             30,719       10.9
Interest expense, net           180       0.1                204          -
Income before income
 taxes                       55,113      16.5             30,515       10.9
Provision for income
 taxes                       21,196       6.3             11,757        4.2
Net income                $  33,917      10.2          $  18,758        6.7
Earnings per share
  Basic                   $    1.91         -          $    1.06          -
  Diluted                 $    1.87         -          $    1.04          -
Average shares
 outstanding
  Basic                      17,749         -             17,647          -
  Diluted                    18,125         -             17,976          -





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

                                           9/25/10            12/26/09
Assets:
Cash and cash equivalents                $    18,890         $    10,626
Accounts receivable                          113,775              88,164
Inventories                                  104,528              89,927
Deferred income taxes                         13,351              12,620
Prepaid expenses                               2,282               2,248
Total current assets                         252,826             203,585
Property & equipment                          26,499              25,218
Goodwill                                      26,553              26,553
Other assets                                   1,869               2,046
Total assets                             $   307,747         $   257,402

Liabilities & Shareholders' Equity:
Current portion of long-term debt        $        93         $        90
Accounts payable                              29,971              16,098
Accrued expenses and other                    15,284              14,244
Total current liabilities                     45,348              30,432
Long-term debt and other                       3,069               2,941
Deferred income taxes                          8,762               8,694
Shareholders' equity                         250,568             215,335
Total Liabilities and Equity             $   307,747         $   257,402






Selected Cash Flow
 Information:
     (in thousands)       13 Weeks (unaudited)         39 Weeks (Unaudited)
                          --------------------         --------------------
                          9/25/10     9/26/09           9/25/10    9/26/09
Depreciation and
 amortization             $  2,137    $  2,027         $  6,016    $  5,774
Capital Expenditures      $  3,019    $  2,358         $  7,187    $  5,926