Exhibit 99.1
NEWS RELEASE
Contact:Matthew Kohnke, CFO,mkohnke@dormanproducts.com, (215) 997-1800. Visit our website atwww.dormanproducts.com
Dorman Products, Inc. Reports Sales and Earnings
For the Third Quarter Ended September 28, 2013
Third Quarter Highlights:
| • | | Sales increased 14% to $178 million. |
| • | | Income from continuing operations increased 16% to $22.9 million, or $0.62 per diluted share. |
| • | | Operating margin increased to 20.0% from 19.9% during the same period last year. |
COLMAR, PENNSYLVANIA (October 29, 2013) – Dorman Products, Inc. (NASDAQ:DORM) today announced sales for the third quarter ended September 28, 2013 of $178.0 million, an increase of 14% from $156.4 million in the third quarter of 2012. The Company also announced income from continuing operations of $22.9 million, or $0.62 per diluted share, for the third quarter ended September 28, 2013, up 16% from the prior year’s income from continuing operations of $19.8 million, or $0.54 per diluted share.
“Strong demand for our products, including those introduced in the last 24 months, resulted in the 14% sales increase during the third quarter. We are especially pleased with this strong sales increase in light of the fact that sales growth in the third quarter of 2012 was 20%,” said Mr. Steven Berman, Chairman and Chief Executive Officer.
Gross profit margin was 39.2% for the third quarter ended September 28, 2013, compared to 38.2% for the same period last year. The improvement in margin is primarily the result of a favorable change in sales mix and lower transportation costs. Selling, general and administrative expenses increased 19% in 2013 to $34.0 million from $28.6 million in 2012. Cost increases were primarily the result of higher variable costs associated with the 14% sales growth, increased spending on product development activities, and depreciation and other related support costs associated with our recent enterprise reporting system implementation.
For the nine months ended September 28, 2013, sales increased 14% over the prior year period to $494.7 million from $435.4 million last year. Income from continuing operations in 2013 increased 20% to $61.3 million from $51.2 million in the same period last year. Diluted earnings per share from continuing operations in 2013 rose 19% to $1.67 from $1.40 in the same period last year. Research and development spending for the year increased 22% to $9.5 million from $7.8 million last year.
“We continue to make investments in new product development activities to allow future growth opportunities for us and our customers. We are very excited about the launch of our Dorman Hybrid initiative. Early customer and end user feedback on the initiative has been positive,” said Mr. Berman. “Our booth at November’s Automotive Aftermarket Parts Expo (AAPEX) will provide a showcase for many of our latest new-to-the-aftermarket parts, including our Hybrid Drive Batteries. As with prior years at AAPEX, everything at the Dorman booth will be new – giving our customers the opportunity to see highlights of the over 2,700 new parts we have released in 2013.”
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®, renew™, TECHoice™, Dorman HD Solutions™ and Symmetry® brand names.
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. 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 29, 2012. 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 | |
Third Quarter (unaudited) | | 9/28/13 | | | Pct. | | | 9/29/12 | | | Pct. | |
Net sales | | $ | 177,953 | | | | 100.0 | | | $ | 156,411 | | | | 100.0 | |
Cost of goods sold | | | 108,249 | | | | 60.8 | | | | 96,665 | | | | 61.8 | |
Gross profit | | | 69,704 | | | | 39.2 | | | | 59,746 | | | | 38.2 | |
Selling, general and administrative expenses | | | 34,034 | | | | 19.2 | | | | 28,615 | | | | 18.3 | |
Income from operations | | | 35,670 | | | | 20.0 | | | | 31,131 | | | | 19.9 | |
Interest expense, net | | | 47 | | | | — | | | | 38 | | | | — | |
Income from continuing operations before income taxes | | | 35,623 | | | | 20.0 | | | | 31,093 | | | | 19.9 | |
Provision for income taxes | | | 12,736 | | | | 7.1 | | | | 11,337 | | | | 7.3 | |
Income from continuing operations | | | 22,887 | | | | 12.9 | | | | 19,756 | | | | 12.6 | |
Income from discontinued operations | | | — | | | | — | | | | 586 | | | | — | |
Net income | | $ | 22,887 | | | | — | | | $ | 20,342 | | | | — | |
Diluted earnings per share: | | | | | | | | | | | | | | | | |
Continuing operations | | $ | 0.62 | | | | — | | | $ | 0.54 | | | | — | |
Discontinued operations | | | — | | | | — | | | | 0.02 | | | | — | |
Diluted earnings per share | | $ | 0.62 | | | | — | | | $ | 0.56 | | �� | | — | |
| | | | |
Weighted average diluted shares outstanding | | | 36,632 | | | | — | | | | 36,622 | | | | — | |
DORMAN PRODUCTS, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(in thousands, except per-share amounts)
| | | | | | | | | | | | | | | | |
| | 39 Weeks | | | 39 Weeks | |
Third Quarter (unaudited) | | 9/28/13 | | | Pct. | | | 9/29/12 | | | Pct. | |
Net sales | | $ | 494,657 | | | | 100.0 | | | $ | 435,406 | | | | 100.0 | |
Cost of goods sold | | | 299,774 | | | | 60.6 | | | | 272,038 | | | | 62.5 | |
Gross profit | | | 194,883 | | | | 39.4 | | | | 163,368 | | | | 37.5 | |
Selling, general and administrative expenses | | | 98,551 | | | | 19.9 | | | | 82,103 | | | | 18.8 | |
Income from operations | | | 96,332 | | | | 19.5 | | | | 81,265 | | | | 18.7 | |
Interest expense, net | | | 148 | | | | 0.1 | | | | 90 | | | | 0.1 | |
Income from continuing operations before income taxes | | | 96,184 | | | | 19.4 | | | | 81,175 | | | | 18.6 | |
Provision for income taxes | | | 34,883 | | | | 7.0 | | | | 30,019 | | | | 6.9 | |
Income from continuing operations | | | 61,301 | | | | 12.4 | | | | 51,156 | | | | 11.7 | |
Income from discontinued operations | | | — | | | | — | | | | 4,506 | | | | — | |
Net income | | $ | 61,301 | | | | — | | | $ | 55,662 | | | | — | |
Diluted earnings per share: | | | | | | | | | | | | | | | | |
Continuing operations | | $ | 1.67 | | | | — | | | $ | 1.40 | | | | — | |
Discontinued operations | | | — | | | | — | | | | 0.13 | | | | — | |
Diluted earnings per share | | $ | 1.67 | | | | — | | | $ | 1.53 | | | | — | |
| | | | |
Weighted average diluted shares outstanding | | | 36,610 | | | | — | | | | 36,489 | | | | — | |
DORMAN PRODUCTS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
(in thousands)
| | | | | | | | |
| | 9/28/13 | | | 12/29/12 | |
Assets: | | | | | | | | |
Cash and cash equivalents | | $ | 48,335 | | | $ | 27,708 | |
Accounts receivable | | | 178,702 | | | | 140,180 | |
Inventories | | | 149,098 | | | | 145,270 | |
Deferred income taxes | | | 20,093 | | | | 20,559 | |
Prepaid expenses | | | 2,799 | | | | 2,332 | |
Total current assets | | | 399,027 | | | | 336,049 | |
Property & equipment | | | 58,717 | | | | 48,758 | |
Goodwill and other intangible assets | | | 30,114 | | | | 26,553 | |
Other assets | | | 1,734 | | | | 1,323 | |
Total assets | | $ | 489,592 | | | $ | 412,683 | |
| | |
Liabilities & Shareholders’ Equity: | | | | | | | | |
Accounts payable | | $ | 49,136 | | | $ | 42,387 | |
Accrued expenses and other | | | 28,654 | | | | 21,298 | |
Total current liabilities | | | 77,790 | | | | 63,685 | |
Other long-term liabilities | | | 5,779 | | | | 3,447 | |
Deferred income taxes | | | 12,449 | | | | 12,679 | |
Shareholders’ equity | | | 393,574 | | | | 332,872 | |
Total Liabilities and Equity | | $ | 489,592 | | | $ | 412,683 | |
Selected Cash Flow Information:
| | | | | | | | | | | | | | | | |
(in thousands) | | 13 Weeks (unaudited) | | | 39 Weeks (unaudited) | |
| | 9/28/13 | | | 9/29/12 | | | 9/28/13 | | | 9/29/12 | |
Depreciation and amortization | | $ | 2,684 | | | $ | 2,017 | | | $ | 7,417 | | | $ | 5,973 | |
Capital expenditures | | $ | 5,863 | | | $ | 4,983 | | | $ | 12,949 | | | $ | 14,437 | |