EX-99.1 2 d184953dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

NEWS RELEASE

 

LOGO

Contact: Matt Barton, President and CEO, mbarton@dormanproducts.com, (215) 997-1800. Visit our website at www.dormanproducts.com

For Further Information Contact:

Dorman Products, Inc. Reports Sales and Earnings

For the First Quarter Ended March 26, 2016

 

    Q1 sales increased 10% to $208.1 million

 

    Q1 EPS increased 18% to $0.71 per diluted share

 

    Cash flow from operations was $23.9 million

COLMAR, PENNSYLVANIA (April 26, 2016) – Dorman Products, Inc. (NASDAQ:DORM) today announced sales for the first quarter ended March 26, 2016 of $208.1 million, an increase of 10% from $188.5 million in the first quarter of 2015. Diluted earnings per share for the first quarter ended March 26, 2016 increased 18% to $0.71 per share from $0.60 per share in the first quarter of 2015.

“We are pleased with our first quarter sales growth. It exceeded our expectations as a result of stronger than anticipated inventory expansion by one customer, and strong purchase and sell through levels throughout most of our customer base. First quarter 2016 EPS grew by 18% on 10% sales growth as a result of solid operating expense leverage. Our outlook for the year is for mid- to high- single digit revenue and profit growth despite the strong start to 2016 as we expect increased competitive pressures to impact results beginning in the second quarter. We remain optimistic about on the long-term outlook for the business as we continue to invest in our new product capabilities in the markets we serve,” said Matt Barton, President and Chief Executive Officer.

Gross profit margin was consistent year over year at 38.7%. SG&A expenses increased 6% in the first quarter of 2016 to $41.7 million from $39.2 million in the first quarter of 2015. The increase was the result of higher variable expenses associated with our sales growth and labor cost increases. Results for the first quarter of 2016 include a pre-tax charge of $0.9 million for an additional provision for uncollectible accounts receivable due to the bankruptcy of one customer early in the year. We expect no further impact from this matter. Results for the first quarter of 2015 included $1.7 million in incremental costs associated with our now completed September 2014 ERP conversion.

“We are working hard on all fronts to continue to grow the Aftermarket one innovation at a time. A few examples of our recent success include:

 

    New product additions resulted in 1,103 unique SKU’s in the first quarter.

 

    Our Dorman HD Solutions offering continues to gain momentum in the heavy duty aftermarket, and was up 60% in the first quarter of 2016. Revenue from new products including EGR components, fluid reservoirs and lighting, combined with increased penetration across core customers drove the performance. We are confident that this brand will continue its strong growth trajectory.

 

    Our investments in Complex Electronics are paying off, with a year over year sales increase of 58%.

 

    In April we distributed over 1 million copies of our 2016 ‘Service Dealer Guide’ publication to our distribution partners, stores and technicians. This new guide features formerly ‘Dealer Only’ parts – now available to the Aftermarket. These exclusive new parts reduce dependency on the OE Dealer and provide Dorman’s customers a better choice for automotive replacement parts.


I would like to thank all of our contributors for another successful quarter, and our customers and end-users for their continued support and acceptance of our new products,” said Mr. Barton.

The Company repurchased 207,166 shares of its common stock for $9.6 million at an average price of $46.46 per share during the first quarter of 2016, and has $64.3 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  
     3/26/16      Pct.      3/28/15      Pct.  

First Quarter (unaudited)

           

Net sales

   $ 208,148         100.0       $ 188,474         100.0   

Cost of goods sold

     127,554         61.3         115,581         61.3   

Gross profit

     80,594         38.7         72,893         38.7   

Selling, general and administrative expenses

     41,663         20.0         39,241         20.8   

Income from operations

     38,931         18.7         33,652         17.9   

Interest expense, net

     57         0.0         52         0.1   

Income before income taxes

     38,874         18.7         33,600         17.8   

Provision for income taxes

     14,203         6.8         12,261         6.5   

Net income

   $ 24,671         11.9       $ 21,339         11.3   
Diluted earnings per share    $ 0.71          $ 0.60      

Weighted average diluted shares outstanding

     34,734            35,643      


DORMAN PRODUCTS, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Unaudited)

(in thousands)

 

     3/26/16      12/26/15  

Assets:

     

Cash and cash equivalents

   $ 86,978       $ 78,659   

Accounts receivable

     207,395         203,923   

Inventories

     187,586         193,725   

Prepaid expenses

     2,732         2,326   

Total current assets

     484,691         478,633   

Property, plant & equipment, net

     88,429         87,046   

Goodwill and other intangible assets, net

     29,864         29,889   

Deferred income taxes, net

     7,999         7,557   

Other assets

     20,226         18,740   

Total assets

   $ 631,209       $ 621,865   

Liabilities & shareholders’ equity:

     

Accounts payable

   $ 52,262       $ 63,967   

Accrued expenses and other

     40,225         34,603   

Total current liabilities

     92,487         98,570   

Other long-term liabilities

     5,572         5,259   

Shareholders’ equity

     533,150         518,036   

Total liabilities and equity

   $ 631,209       $ 621,865   

 

Selected Cash Flow Information (unaudited):

     
(in thousands)    13 Weeks      13 Weeks  
     3/26/16      3/28/15  

Depreciation, amortization and accretion

   $ 4,499       $ 3,618   

Capital expenditures

   $ 5,598       $ 5,749