COLMAR, PA--(Marketwired - Oct 28, 2014) - Dorman Products, Inc. (
Third Quarter Highlights:
Dorman Products, Inc. (
"Third quarter sales growth represents the seventh consecutive quarter of double digit sales growth, and was consistent with our expectations. Sales growth in the third quarter excluding the customer stock-up orders would have been 5%, which is below recent levels. The lower sales growth is the result of softer order patterns from several customers that appear to be working down inventories, as sell-through of our products by our customers continues to be strong," said Mr. Steven Berman, Chairman and Chief Executive Officer. "Sales growth was 17% for the first nine months of 2014, driven by continued strong demand for our new products. We remain committed to our strategy of expanding the aftermarket through new product introduction, and believe that we have the product pipeline necessary to meet our future expectations for growth."
Gross profit margin was 38.4% for the third quarter ended September 27, 2014, compared to 39.2% for the same period last year. The decline in margin was primarily the result of competitive pricing pressures and mix shift that resulted in lower overall net selling prices. Selling, general and administrative expenses increased 10% in 2014 to $37.4 million from $34.0 million in 2013, but declined as a percentage of sales to 18.9% from 19.2%. Cost increases were primarily the result of higher variable costs associated with the 11% sales growth and increased investments in new product development initiatives.
For the nine months ended September 27, 2014, sales increased 17% over the prior year period to $577.5 million from $494.7 million last year. Net income in 2014 increased 16% to $71.3 million from $61.3 million in the same period last year. Diluted earnings per share in 2014 rose 17% to $1.96 from $1.67 in the same period last year.
"We continue to make investments in the business to achieve our long-term goals. In September, we replaced our ERP software system. While the conversion was not without its challenges, we are happy to report that the conversion resulted in minimal disruption to our customers and the business in general. We expect to spend the next six to twelve months completing the stabilization and transition phase of the conversion after which we believe we will begin to generate benefits in the form of improved customer service and operating efficiencies. The fourth quarter will bear additional costs as a result of post-conversion support activities. These costs are expected to be approximately $2.6 million, exclusive of $0.5 million in incremental depreciation expense in the fourth quarter." said Mr. Berman.
The Company also announced that its Board of Directors has approved an expansion and extension to the on-going share repurchase program. Under the expansion, the Board of Directors has authorized an increase to the share repurchase program from $50 million to $100 million. In connection with the expansion, the Board of Directors has extended the expiration date of the share repurchase program from May 31, 2015 to December 31, 2015. During the third quarter ended September 27, 2014, Dorman repurchased 671,200 shares of its common stock for $30.7 million, at an average price of $45.80 per share. During the first nine months of 2014, the Company has repurchased 833,100 shares of its common stock for $39.3 million, at an average price of $47.15 per share.
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.
Visit our website at www.dormanproducts.com
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 28, 2013. 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 data) | ||||||||||
| 13 Weeks | 13 Weeks | |||||||||
| Third Quarter (unaudited) | 9/27/14 | Pct. | 9/28/13 | Pct. | ||||||
| Net sales | $ | 197,796 | 100.0 | $ | 177,953 | 100.0 | ||||
| Cost of goods sold | 121,915 | 61.6 | 108,249 | 60.8 | ||||||
| Gross profit | 75,881 | 38.4 | 69,704 | 39.2 | ||||||
| Selling, general and administrative expenses | 37,405 | 18.9 | 34,034 | 19.2 | ||||||
| Income from operations | 38,476 | 19.5 | 35,670 | 20.0 | ||||||
| Interest expense, net | 58 | 0.1 | 47 | - | ||||||
| Income before income taxes | 38,418 | 19.4 | 35,623 | 20.0 | ||||||
| Provision for income taxes | 13,882 | 7.0 | 12,736 | 7.1 | ||||||
| Net income | $ | 24,536 | 12.4 | $ | 22,887 | 12.9 | ||||
| Diluted earnings per share | $ | 0.68 | $ | 0.62 | ||||||
| Weighted average diluted shares outstanding | 36,024 | 36,632 | ||||||||
| DORMAN PRODUCTS, INC. AND SUBSIDIARIES | ||||||||||
| Consolidated Statements of Operations | ||||||||||
| (in thousands, except per-share data) | ||||||||||
| 39 Weeks | 39 Weeks | |||||||||
| Third Quarter (unaudited) | 9/27/14 | Pct. | 9/28/13 | Pct. | ||||||
| Net sales | $ | 577,495 | 100.0 | $ | 494,657 | 100.0 | ||||
| Cost of goods sold | 357,011 | 61.8 | 299,774 | 60.6 | ||||||
| Gross profit | 220,484 | 38.2 | 194,883 | 39.4 | ||||||
| Selling, general and administrative expenses | 108,361 | 18.8 | 98,551 | 19.9 | ||||||
| Income from operations | 112,123 | 19.4 | 96,332 | 19.5 | ||||||
| Interest expense, net | 160 | - | 148 | 0.1 | ||||||
| Income before income taxes | 111,963 | 19.4 | 96,184 | 19.4 | ||||||
| Provision for income taxes | 40,632 | 7.0 | 34,883 | 7.0 | ||||||
| Net income | $ | 71,331 | 12.4 | $ | 61,301 | 12.4 | ||||
| Diluted earnings per share | $ | 1.96 | - | $ | 1.67 | - | ||||
| Weighted average diluted shares outstanding | 36,372 | - | 36,610 | - | ||||||
| DORMAN PRODUCTS, INC. AND SUBSIDIARIES | ||||||
| Condensed Consolidated Balance Sheets | ||||||
| (Unaudited) | ||||||
| (in thousands) | ||||||
| Assets: | 9/27/14 | 12/28/13 | ||||
| Cash and cash equivalents | $ | 44,210 | $ | 60,593 | ||
| Accounts receivable | 189,220 | 180,777 | ||||
| Inventories | 180,155 | 164,421 | ||||
| Deferred income taxes | 21,258 | 20,798 | ||||
| Prepaid expenses | 3,422 | 5,851 | ||||
| Total current assets | 438,265 | 432,440 | ||||
| Property & equipment | 80,972 | 64,786 | ||||
| Goodwill and other intangible assets | 30,014 | 30,089 | ||||
| Other assets | 2,935 | 1,854 | ||||
| Total assets | $ | 552,186 | $ | 529,169 | ||
| Liabilities & Shareholders' Equity: | ||||||
| Accounts payable | $ | 53,955 | $ | 61,255 | ||
| Accrued expenses and other | 28,346 | 30,483 | ||||
| Total current liabilities | 82,301 | 91,738 | ||||
| Other long-term liabilities | 5,694 | 5,310 | ||||
| Deferred income taxes | 18,506 | 18,480 | ||||
| Shareholders' equity | 445,685 | 413,641 | ||||
| Total Liabilities and Equity | $ | 552,186 | $ | 529,169 | ||
| Selected Cash Flow Information: | |||||||||||||
| (in thousands) | 13 Weeks (unaudited) | 39 Weeks (unaudited) | |||||||||||
| 9/27/14 | 9/28/13 | 9/27/14 | 9/28/13 | ||||||||||
| Depreciation, amortization and accretion | $ | 3,165 | $ | 2,684 | $ | 9,001 | $ | 7,417 | |||||
| Capital expenditures | $ | 7,114 | $ | 5,863 | $ | 22,992 | $ | 12,949 | |||||