| Corporate Headquarters: |
| Dorman Products, Inc. |
| 3400 East Walnut Street |
| Colmar, Pennsylvania 18915 |
| Fax: (215) 997-8577 |
For Further Information Contact: | | Visit our Home Page: |
Mathias J. Barton, CFO | | www.dormanproducts.com |
(215) 997-1800 x 5132 | | |
E-mail: MBarton@dormanproducts.com | | |
Dorman Products, Inc. Reports Sales and Earnings for the Second Quarter Ended June 26, 2010
Colmar, Pennsylvania (July 27, 2010) – Dorman Products, Inc. (NASDAQ:DORM) today announced financial results for the second quarter ended June 26, 2010.
Revenues for the three months ended June 26, 2010 increased 20% over the prior year to $115.0 million from $96.2 million last year. Net income in the second quarter of 2010 was up 83% to $11.5 million from $6.3 million in the same period last year. Diluted earnings per share rose 80% in the second quarter of 2010 to $0.63 from $0.35 last year.
For the twenty-six weeks ended June 26, 2010 and June 27, 2009:
| | · | Revenues in 2010 increased 17.1% over the prior year to $214.0 million from $182.7 million last year. Revenue growth in both periods was driven by strong overall demand for our products and higher new product sales. |
| | · | Net income in 2010 was up 95% to $21.1 million from $10.8 million last year. Diluted earnings per share in 2010 rose 95% to $1.17 from $0.60 in 2009. |
| | · | Gross profit margin was 37.9% in 2010 compared to 33.1% 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 8.4% in 2010 to $46.3 million from $42.7 million in 2009, but were down as a percentage of sales from 23.4% in 2009 to 21.6% 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 increased to 39.1% from 38.5% in the prior year. The increase is a result of proportionately higher losses in foreign jurisdictions for which no tax benefit was recorded. |
| | · | Operating cash flow for 2010 was $16.7 million compared to $7.1 million in 2009. |
Mr. Richard Berman, Chairman and Chief Executive Officer, said, “We reported a 20% increase in sales in the second quarter, and sales growth of 17% for the year. Continued growth in our New to the Aftermarket product lines along with strong market demand for most other product lines are the primary reasons for these sales increases. Our organization remains focused on continuing to strengthen the fundamentals of our business, all of which are centered on new product development and satisfying the needs of our customers and end users. We are committed to growing all existing Dorman product lines and enhancing this growth with further investments in new product development.”
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 (R), OE Solutions (TM), HELP! (R), AutoGrade (TM), First Stop (TM), Conduct-Tite (R), Symmetry (R) and Scan-Tech (R) 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 | |
| Second Quarter (unaudited) | | 6/26/10 Pct. | | | 6/27/09 Pct. | |
| Net sales | | $ | 115,009 | | | | 100.0 | | | $ | 96,242 | | | | 100.0 | |
| Cost of goods sold | | | 71,681 | | | | 62.3 | | | | 64,214 | | | | 66.7 | |
| Gross profit | | | 43,328 | | | | 37.7 | | | | 32,028 | | | | 33.3 | |
| Selling, general and administrative expenses | | | 24,230 | | | | 21.1 | | | | 21,751 | | | | 22.6 | |
| Income from operations | | | 19,098 | | | | 16.6 | | | | 10,277 | | | | 10.7 | |
| Interest expense, net | | | 58 | | | | - | | | | 71 | | | | 0.1 | |
| Income before income taxes | | | 19,040 | | | | 16.6 | | | | 10,206 | | | | 10.6 | |
| Provision for income taxes | | | 7,555 | | | | 6.6 | | | | 3,937 | | | | 4.1 | |
| Net income | | $ | 11,485 | | | | 10.0 | | | | 6,269 | | | | 6.5 | |
| Earnings per share | | | | | | | | | | | | | | | | |
| Basic | | $ | 0.65 | | | | - | | | $ | 0.36 | | | | - | |
| Diluted | | $ | 0.63 | | | | - | | | $ | 0.35 | | | | - | |
| Average shares outstanding | | | | | | | | | | | | | | | | |
| Basic | | | 17,757 | | | | - | | | | 17,640 | | | | - | |
| Diluted | | | 18,127 | | | | - | | | | 17,989 | | | | - | |
DORMAN PRODUCTS, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(in thousands, except per-share amounts)
| | | 26 Weeks | | | 26 Weeks | |
| Second Quarter (unaudited) | | 6/26/10 Pct. | | | 6/27/09 Pct. | |
| Net sales | | $ | 213,985 | | | | 100.0 | | | $ | 182,673 | | | | 100.0 | |
| Cost of goods sold | | | 132,880 | | | | 62.1 | | | | 122,248 | | | | 66.9 | |
| Gross profit | | | 81,105 | | | | 37.9 | | | | 60,425 | | | | 33.1 | |
| Selling, general and administrative expenses | | | 46,308 | | | | 21.6 | | | | 42,685 | | | | 23.4 | |
| Income from operations | | | 34,797 | | | | 16.3 | | | | 17,740 | | | | 9.7 | |
| Interest expense, net | | | 123 | | | | 0.1 | | | | 152 | | | | 0.1 | |
| Income before income taxes | | | 34,674 | | | | 16.2 | | | | 17,588 | | | | 9.6 | |
| Provision for income taxes | | | 13,574 | | | | 6.3 | | | | 6,763 | | | | 3.7 | |
| Net income | | $ | 21,100 | | | | 9.9 | | | $ | 10,825 | | | | 5.9 | |
| Earnings per share | | | | | | | | | | | | | | | | |
| Basic | | $ | 1.19 | | | | - | | | $ | 0.61 | | | | - | |
| Diluted | | $ | 1.17 | | | | - | | | $ | 0.60 | | | | - | |
| Average shares outstanding | | | | | | | | | | | | | | | | |
| Basic | | | 17,723 | | | | - | | | | 17,642 | | | | - | |
| Diluted | | | 18,092 | | | | - | | | | 17,976 | | | | - | |
DORMAN PRODUCTS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
(in thousands)
| | | 6/26/10 | | | 12/26/09 | |
| Assets: | | | | | | |
| Cash and cash equivalents | | $ | 23,310 | | | $ | 10,626 | |
| Accounts receivable | | | 107,352 | | | | 88,164 | |
| Inventories | | | 92,219 | | | | 89,927 | |
| Deferred income taxes | | | 13,108 | | | | 12,620 | |
| Prepaid expenses | | | 2,408 | | | | 2,248 | |
| Total current assets | | | 238,397 | | | | 203,585 | |
| Property & equipment | | | 25,514 | | | | 25,218 | |
| Goodwill | | | 26,553 | | | | 26,553 | |
| Other assets | | | 1,864 | | | | 2,046 | |
| Total assets | | $ | 292,328 | | | $ | 257,402 | |
| | | | | | | | | |
| Liability & Shareholders’ Equity: | | | | | | | | |
| Current portion of long-term debt | | $ | 92 | | | $ | | |
| Accounts payable | | | 31,374 | | | | 16,098 | |
| Accrued expenses and other | | | 12,789 | | | | 14,244 | |
| Total current liabilities | | | 44,255 | | | | 30,432 | |
| Long-term debt and other | | | 3,151 | | | | 2,941 | |
| Deferred income taxes | | | 8,782 | | | | 8,694 | |
| Shareholders’ equity | | | 236,140 | | | | 215,335 | |
| Total Liabilities and Equity | | $ | 292,328 | | | $ | 257,402 | |
| Selected Cash Flow Information: | | 13 Weeks (unaudited) | | | 26 Weeks (Unaudited) | |
| (in thousands) | | 6/26/10 | | | 6/27/09 | | | 6/26/10 | | | 6/27/09 | |
Depreciation and amortization | | $ | 1,955 | | | $ | 1,857 | | | $ | 3,879 | | | $ | 3,747 | |
| Capital Expenditures | | $ | 2,174 | | | $ | 1,657 | | | $ | 4,168 | | | $ | 3,568 | |
