-- Gross profit margin was 32.2% in 2008 compared to 34.3% in the prior
year. The decrease is primarily the result of strategic investments to
grow market share and higher material and shipping costs.
-- Selling, general and administrative expenses in 2008 increased 4.7% to
$81.8 million from $78.1 million in 2007. The increase is the result of
higher variable costs related to our sales growth and increased staffing
levels in product development, engineering and quality control. These
increases were partially offset by incentive compensation expense which was
$1.8 million lower in 2008 than in the prior year due to lower earnings
levels. Results for 2007 also include a $1.4 million reduction in vacation
expense due to the vacation policy change mentioned above.
-- Interest expense, net, decreased to $0.9 million in 2008 from $1.9
million in 2007 due to lower borrowing levels and interest rates.
-- Our effective tax rate decreased to 35.2% from 40.2% in the prior
year. The decrease is primarily the result of a $0.7 million tax benefit
realized upon the disposition of our Canadian subsidiary.
Mr. Richard Berman, Chairman and Chief Executive Officer, said, "Our OE
Solutions product lines continued to grow at double digit rates in the
fourth quarter while most other lines declined due to softened demand. Our
customers and end users continue to support our new products despite the
weak economy. The strength of our balance sheet affords us the opportunity
to make investments in new product development so that we can continue to
enhance our leadership position in the aftermarket with innovative new
products and solutions for our customers and end users."
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 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 2007 Annual
Report on Form 10-K under "Item 1" - Risk Factors.
DORMAN PRODUCTS, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(in thousands, except per-share amounts)
13 Weeks 13 Weeks
-------- --------
Fourth Quarter (unaudited) 12/27/08 Pct. 12/29/07 Pct.
Net sales $ 80,687 100.0 $ 84,462 100.0
Cost of goods sold 54,875 68.0 56,343 66.7
Gross profit 25,812 32.0 28,119 33.3
Selling, general and
administrative expenses 19,318 24.0 20,220 23.9
Goodwill impairment - - 414 0.5
Income from operations 6,494 8.0 7,485 8.9
Interest expense, net 146 0.1 305 0.4
Income before income taxes 6,348 7.9 7,180 8.5
Provision for income taxes 1,498 1.9 3,496 4.1
Net income $ 4,850 6.0 $ 3,684 4.4
Earnings per share
Basic $ 0.27 - $ 0.21 -
Diluted $ 0.27 - $ 0.20 -
Average shares outstanding
Basic 17,649 - 17,699 -
Diluted 18,018 - 18,132 -
52 Weeks 52 Weeks
-------- --------
Year to Date 12/27/08 Pct. 12/29/07 Pct.
Net sales $342,325 100.0 $327,725 100.0
Cost of goods sold 232,140 67.8 215,256 65.7
Gross profit 110,185 32.2 112,469 34.3
Selling, general and
administrative expenses 81,781 23.9 78,083 23.8
Goodwill impairment - - 414 0.1
Income from operations 28,404 8.3 33,972 10.4
Interest expense, net 920 0.3 1,856 0.6
Income before income taxes 27,484 8.0 32,116 9.8
Provision for income taxes 9,671 2.8 12,923 3.9
Net income $ 17,813 5.2 $ 19,193 5.9
Earnings per share
Basic $ 1.01 - $ 1.08 -
Diluted $ 0.99 - $ 1.06 -
Average shares outstanding
Basic 17,675 - 17,693 -
Diluted 18,049 - 18,132 -
DORMAN PRODUCTS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands)
12/27/08 12/29/07
Assets:
Cash and cash equivalents $ 5,824 $ 6,918
Accounts receivable 77,101 76,897
Inventories 93,577 80,565
Deferred income taxes 11,626 10,111
Prepaid expenses 2,135 1,921
Total current assets 190,263 176,412
Property & equipment 25,053 25,680
Goodwill 26,553 26,662
Other assets 1,553 1,901
Total assets $243,422 $230,655
Liability & Shareholders' Equity:
Current portion of long-term debt $ 86 $ 8,654
Accounts payable 21,900 18,752
Accrued expenses and other 8,040 10,718
Total current liabilities 30,026 38,124
Long-term debt and other 17,464 10,811
Deferred income taxes 8,088 7,862
Shareholders' equity 187,844 173,858
Total Liabilities and Equity $243,422 $230,655
Selected Cash Flow Information:
(in thousands) 13 Weeks (unaudited) 52 Weeks (unaudited)
-------------------- --------------------
12/27/08 12/29/07 12/27/08 12/29/07
Depreciation and
amortization $ 1,965 $ 1,992 $ 7,672 $ 7,744
Capital Expenditures $ 1,531 $ 1,310 $ 7,323 $ 5,371
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:
-- Effective December 31, 2006, we changed our vacation policy so
that vacation is earned ratably throughout the year rather than
at the end of the preceding year. This change resulted in a
reduction in our vacation accrual of $1.8 million in 2007, $0.4
million of which was recorded in the three months ended December
29, 2007.
-- Results for the thirteen weeks and year ended December 29, 2007
include $0.4 million in non-cash write downs of goodwill of our
Canadian subsidiary as a result of a strategic review and
realignment of the business as well as a $0.6 million non-cash
charge to our provision for income taxes to provide a valuation
allowance for deferred tax assets of the subsidiary.
-- 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)
----------------------------
12/27/08 12/29/07 % Change
Net income, as reported $ 4,850 $ 3,684 31.7%
Less: Vacation adjustment, net of tax - (274) N/A
Less: Tax benefit upon diposition of
subsidiary (673) - N/A
Add: Asset write down - 998 N/A
-------- -------- --------
Net income, as adjusted $ 4,177 $ 4,408 -5.2%
======== ======== ========
Diluted EPS, as reported $ 0.27 $ 0.20 35.0%
Less: Vacation adjustment, net of tax - (0.02) N/A
Less: Tax benefit upon diposition of
subsidiary (0.04) - N/A
Add: Asset write down - 0.06 N/A
-------- -------- --------
Diluted EPS, as adjusted $ 0.23 $ 0.24 -4.2%
======== ======== ========
52 Weeks (unaudited)
----------------------------
12/27/08 12/29/07 % Change
Net income, as reported $ 17,813 $ 19,193 -7.2%
Less: Vacation adjustment, net of tax - (1,094) N/A
Less: Tax benefit upon diposition of
subsidiary (673) - N/A
Add: Asset write down - 998 N/A
-------- -------- --------
Net income, as adjusted $ 17,140 $ 19,097 -10.2%
======== ======== ========
Diluted EPS, as reported $ 0.99 $ 1.06 -6.6%
Less: Vacation adjustment, net of tax - (0.06) N/A
Less: Tax benefit upon diposition of
subsidiary (0.04) N/A
Add: Asset write down - 0.05 N/A
-------- -------- --------
Diluted EPS, as adjusted $ 0.95 $ 1.05 -9.5%
======== ======== ========
Contact Information: Corporate Headquarters: Dorman Products, Inc. 3400 East Walnut Street Colmar, Pennsylvania 18915 Fax: (215) 997-8577 Visit our Home Page: www.dormanproducts.com For Further Information Contact: Mathias J. Barton CFO (215) 997-1800 x 5132 E-mail: