Cover
Cover - shares | 3 Months Ended | |
Apr. 01, 2023 | Apr. 27, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Apr. 01, 2023 | |
Document Transition Report | false | |
Entity File Number | 0-18914 | |
Entity Registrant Name | Dorman Products, Inc. | |
Entity Address, State or Province | PA | |
Entity Tax Identification Number | 23-2078856 | |
Entity Address, Address Line One | 3400 East Walnut Street | |
Entity Address, City or Town | Colmar | |
Entity Incorporation, State or Country Code | PA | |
Entity Address, Postal Zip Code | 18915 | |
City Area Code | 215 | |
Local Phone Number | 997-1800 | |
Title of 12(b) Security | Common stock, par value $0.01 per share | |
Trading Symbol | DORM | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 31,468,334 | |
Entity Central Index Key | 0000868780 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Apr. 01, 2023 | Mar. 26, 2022 | |
Income Statement [Abstract] | ||
Net sales | $ 466,738 | $ 401,579 |
Cost of goods sold | 322,261 | 268,339 |
Gross profit | 144,477 | 133,240 |
Selling, general and administrative expenses | 126,363 | 86,528 |
Income from operations | 18,114 | 46,712 |
Interest expense, net | 11,953 | 1,231 |
Other income, net | (357) | (84) |
Income before income taxes | 6,518 | 45,565 |
Provision for income taxes | 835 | 10,358 |
Net income | 5,683 | 35,207 |
Other comprehensive income: | ||
Change in foreign currency translation adjustment | 119 | 1,696 |
Comprehensive Income | $ 5,802 | $ 36,903 |
Earnings per share: | ||
Earning per share, basic (in dollars per share) | $ 0.18 | $ 1.12 |
Earning per share, diluted (in dollars per share) | $ 0.18 | $ 1.11 |
Weighted average shares outstanding: | ||
Weighted average shares outstanding, basic (in shares) | 31,436 | 31,499 |
Weighted average shares outstanding, diluted (in shares) | 31,537 | 31,601 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Apr. 01, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 33,307 | $ 46,034 |
Accounts receivable, less allowance for doubtful accounts of $1,398 and $1,363 | 429,308 | 427,385 |
Inventories | 686,949 | 755,901 |
Prepaids and other current assets | 40,173 | 39,800 |
Total current assets | 1,189,737 | 1,269,120 |
Property, plant and equipment, net | 151,541 | 148,477 |
Operating lease right-of-use assets | 108,549 | 109,977 |
Goodwill | 443,336 | 443,035 |
Intangible assets, net | 316,999 | 322,409 |
Other assets | 50,497 | 48,768 |
Total assets | 2,260,659 | 2,341,786 |
Current liabilities: | ||
Accounts payable | 145,686 | 179,819 |
Accrued compensation | 14,606 | 19,490 |
Accrued customer rebates and returns | 170,432 | 192,116 |
Revolving credit facility | 215,460 | 239,363 |
Current portion of long-term debt | 12,500 | 12,500 |
Other accrued liabilities | 48,239 | 35,007 |
Total current liabilities | 606,923 | 678,295 |
Long-term debt | 479,439 | 482,464 |
Long-term operating lease liabilities | 96,571 | 98,221 |
Other long-term liabilities | 16,749 | 28,349 |
Deferred tax liabilities, net | 11,833 | 11,826 |
Commitments and contingencies | ||
Shareholders’ equity: | ||
Common stock, $0.01 par value; 50,000,000 shares authorized; 31,469,310 and 31,430,632 shares issued and outstanding in 2023 and 2022, respectively | 315 | 314 |
Additional paid-in capital | 90,416 | 88,750 |
Retained earnings | 961,597 | 956,870 |
Accumulated other comprehensive loss | (3,184) | (3,303) |
Total shareholders’ equity | 1,049,144 | 1,042,631 |
Total liabilities and shareholders' equity | $ 2,260,659 | $ 2,341,786 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Apr. 01, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts and customer credits | $ 1,398 | $ 1,363 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Common stock, shares issued (in shares) | 31,469,310 | 31,430,632 |
Common stock, shares outstanding (in shares) | 31,469,310 | 31,430,632 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) |
Beginning balance (in shares) at Dec. 25, 2021 | 31,607,509 | ||||
Beginning balance at Dec. 25, 2021 | $ 932,736 | $ 316 | $ 77,451 | $ 856,409 | $ (1,440) |
Exercise of stock options (in shares) | 2,478 | ||||
Exercise of stock options | 0 | ||||
Compensation expense under Incentive Stock Plan | 2,152 | 2,152 | |||
Purchase and cancellation of common stock (in shares) | (111,114) | ||||
Purchase and cancellation of common stock | (10,917) | $ (1) | (200) | (10,716) | |
Issuance of non-vested stock, net of cancellations (in shares) | (2,511) | ||||
Issuance of non-vested stock, net of cancellations | 377 | 377 | |||
Other stock related activity, net of tax (in shares) | (16,446) | ||||
Other stock-related activity, net of tax | (1,851) | (874) | (977) | ||
Other comprehensive income | 1,696 | 1,696 | |||
Net income | 35,207 | 35,207 | |||
Ending balance (in shares) at Mar. 26, 2022 | 31,479,916 | ||||
Ending balance at Mar. 26, 2022 | $ 959,400 | $ 315 | 78,906 | 879,923 | 256 |
Beginning balance (in shares) at Dec. 31, 2022 | 31,430,632 | 31,430,632 | |||
Beginning balance at Dec. 31, 2022 | $ 1,042,631 | $ 314 | 88,750 | 956,870 | (3,303) |
Exercise of stock options (in shares) | 15,630 | ||||
Exercise of stock options | 1,049 | 1,049 | |||
Compensation expense under Incentive Stock Plan | 2,312 | 2,312 | |||
Purchase and cancellation of common stock (in shares) | (5,125) | ||||
Purchase and cancellation of common stock | (433) | (9) | (424) | ||
Issuance of non-vested stock, net of cancellations (in shares) | 52,151 | ||||
Issuance of non-vested stock, net of cancellations | 0 | $ 1 | (1) | ||
Other stock related activity, net of tax (in shares) | (23,978) | ||||
Other stock-related activity, net of tax | (2,217) | (1,685) | (532) | ||
Other comprehensive income | 119 | 119 | |||
Net income | $ 5,683 | 5,683 | |||
Ending balance (in shares) at Apr. 01, 2023 | 31,469,310 | 31,469,310 | |||
Ending balance at Apr. 01, 2023 | $ 1,049,144 | $ 315 | $ 90,416 | $ 961,597 | $ (3,184) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 01, 2023 | Mar. 26, 2022 | |
Cash Flows from Operating Activities: | ||
Net income | $ 5,683 | $ 35,207 |
Adjustments to reconcile net income to cash provided by operating activities: | ||
Depreciation, amortization and accretion | 13,540 | 9,743 |
Provision for doubtful accounts | 2,744 | 29 |
Provision for stock-based compensation | 2,334 | 2,152 |
Changes in assets and liabilities: | ||
Accounts receivable | (4,673) | 16,727 |
Inventories | 68,935 | (33,034) |
Prepaids and other current assets | (591) | (853) |
Other assets | (2,130) | (1,976) |
Accounts payable | (34,258) | (12,392) |
Accrued customer rebates and returns | (21,683) | 7,202 |
Accrued compensation and other liabilities | (3,691) | 409 |
Cash provided by operating activities | 26,210 | 23,214 |
Cash Flows from Investing Activities: | ||
Acquisition, net of cash acquired | 267 | 595 |
Property, plant and equipment additions | (10,537) | (7,247) |
Cash used in investing activities | (10,270) | (6,652) |
Cash Flows from Financing Activities: | ||
Payments of revolving credit line | (23,900) | (10,000) |
Payments of long-term debt | (3,125) | 0 |
Proceeds from exercise of stock options | 1,049 | 0 |
Purchase and cancellation of common stock | (433) | (10,752) |
Other stock-related activity | (2,254) | (1,211) |
Cash used in financing activities | (28,663) | (21,963) |
Effect of exchange rate changes on Cash and Cash Equivalents | (4) | 46 |
Net Decrease in Cash and Cash Equivalents | (12,727) | (5,355) |
Cash and Cash Equivalents, Beginning of Period | 46,034 | 58,782 |
Cash and Cash Equivalents, End of Period | 33,307 | 53,427 |
Supplemental Cash Flow Information | ||
Cash paid for interest expense | 11,534 | 999 |
Cash paid for income taxes | $ 1,055 | $ 712 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Apr. 01, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of PresentationAs used herein, unless the context requires otherwise, “Dorman,” the “Company,” “we,” “us,” or “our” refers to Dorman Products, Inc. and its subsidiaries. Our ticker symbol on the NASDAQ Global Select Market is “DORM.”The accompanying unaudited condensed consolidated financial statements have been prepared under U.S. generally accepted accounting principles (“GAAP”) for interim financial information and under the rules and regulations of the U.S. Securities and Exchange Commission. However, they do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of only normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three months ended April 1, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2023 or any future period. We may experience significant fluctuations from quarter to quarter in our results of operations due to the timing of orders placed by our customers and the introduction of new products and product lines to customers. These financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022. |
Acquisitions
Acquisitions | 3 Months Ended |
Apr. 01, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | Acquisitions On October 4, 2022 (the “Closing Date”), Dorman acquired 100% of the issued and outstanding equity interests of Super ATV, LLC ("SuperATV") (the “Transaction”), for aggregate consideration of $509.8 million (net of $6.8 million cash acquired), plus a potential earn-out payment to the sellers of SuperATV not to exceed $100 million in the aggregate, which remains subject to the achievement by SuperATV of certain revenue and gross margin targets in the years ending December 31, 2023 and December 31, 2024. In the three months ended April 1, 2023, we received $0.3 million in cash as proceeds from the closing net working capital adjustments. SuperATV is a leading independent supplier to the powersports aftermarket with a family of highly respected brands spanning functional accessories and upgrades, as well as replacement parts for specialty vehicles. The Transaction was accounted for as a business combination under the acquisition method of accounting. We have allocated the purchase price to tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values. The allocation of the purchase price to the assets acquired and liabilities assumed, including the residual amount allocated to goodwill, as of December 31, 2022, is based upon preliminary information and is subject to change within the permitted measurement period (up to one year from the acquisition date) as additional information concerning final asset and liability valuations is obtained. The fair values that remain preliminary include tax-related liabilities and contingent liabilities. Any material adjustments to the estimates based upon new information identified during the measurement period will be reflected as of the date of the acquisition. The table below details the fair values of the assets acquired and the liabilities assumed at the acquisition date, including applicable measurement period adjustments: (in thousands) Accounts receivable $ 3,317 Inventories 90,428 Prepaids and other current assets 5,293 Property, plant and equipment 23,776 Goodwill 247,474 Identifiable intangible assets 157,500 Operating lease right-of-use assets 11,661 Other Assets 3,001 Accounts payable (7,436) Accrued compensation (2,086) Accrued customer rebates and returns (1,609) Other current liabilities (8,726) Long-term operating lease liabilities (9,508) Other long-term liabilities (3,307) Net cash consideration $ 509,778 |
Sales of Accounts Receivable
Sales of Accounts Receivable | 3 Months Ended |
Apr. 01, 2023 | |
Receivables [Abstract] | |
Sales of Accounts Receivable | Sales of Accounts ReceivableWe have entered several customer-sponsored programs administered by unrelated financial institutions that permit us to sell (factor) certain accounts receivable at discounted rates to the financial institutions. Transactions under these agreements were accounted for as sales of accounts receivable and the related accounts receivable were removed from our Condensed Consolidated Balance Sheets at the times of the sales transactions. Under these agreements, we sold $237.7 million and $275.2 million of accounts receivable during the three months ended April 1, 2023 and March 26, 2022, respectively. Selling, general and administrative expenses include factoring costs associated with these accounts receivable sales programs of $13.5 million and $4.9 million during the three months ended April 1, 2023 and March 26, 2022, respectively. The increase in factoring costs for the three months ended April 1, 2023 compared to the prior year period was driven by higher interest rates during the three months ended April 1, 2023. |
Inventories
Inventories | 3 Months Ended |
Apr. 01, 2023 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories include the cost of material, freight, direct labor and overhead utilized in the processing of our products and are stated at the lower of cost or net realizable value. Inventories were as follows: (in thousands) April 1, 2023 December 31, 2022 Raw materials $ 30,839 $ 34,267 Bulk product 200,491 234,871 Finished product 446,544 478,032 Packaging materials 9,075 8,731 Total $ 686,949 $ 755,901 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Apr. 01, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill Goodwill included the following: (in thousands) Balance at December 31, 2022 $ 443,035 Measurement period adjustments for SuperATV acquisition 233 Foreign currency translation 68 Balance at April 1, 2023 $ 443,336 Intangible Assets Intangible assets included the following: April 1, 2023 December 31, 2022 Intangible assets subject to amortization Gross Carrying Value Accumulated Amortization Net Carrying Value Gross Carrying Value Accumulated Amortization Net Carrying Value (in thousands) Customer relationships $ 175,430 $ 24,156 $ 151,274 $ 175,430 $ 21,643 $ 153,787 Trade names 67,690 7,469 60,221 67,690 6,370 61,320 Product Portfolio 107,800 4,644 103,156 107,800 2,953 104,847 Technology 2,167 882 1,285 2,167 820 1,347 Patents and Other 1,430 367 1,063 1,430 322 1,108 Total $ 354,517 $ 37,518 $ 316,999 $ 354,517 $ 32,108 $ 322,409 Amortization expense was $5.5 million and $3.0 million during the three months ended April 1, 2023 and March 26, 2022, respectively. |
Debt
Debt | 3 Months Ended |
Apr. 01, 2023 | |
Debt Disclosure [Abstract] | |
Debt | DebtAs of April 1, 2023 and December 31, 2022, the weighted average interest rate on the outstanding borrowings under our credit facility was 6.41% and 5.78%, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Apr. 01, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Acquisitions We have contingent consideration related to an acquisition due to the uncertainty of the ultimate amount of any payments that will become due as earnout payments if performance targets are achieved. If the remaining performance targets for the acquisition are fully achieved, the maximum additional contingent payments to be made under the transaction documents would be $100.0 million in aggregate. As of April 1, 2023, we accrued $20.5 million, representing the fair value of the estimated payments that we expect could become due in connection with the transaction. For the three months ended April 1, 2023, we recorded a charge of $0.5 million of accretion on the estimated payment liability, with the charge included in selling, general and administrative expenses in the Condensed Consolidated Statements of Operations. Other Contingencies We are a party to or otherwise involved in legal proceedings that arise in the ordinary course of business, such as various claims and legal actions involving contracts, employment claims, competitive practices, intellectual property infringement, product liability claims and other matters arising out of the conduct of our business. In the opinion of management, none of the actions, |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Apr. 01, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition The following tables present our disaggregated revenue by type of major good / product line, and geography. Three Months Ended (in thousands) April 1, 2023 March 26, 2022 Powertrain $ 171,035 $ 152,228 Chassis 188,864 160,862 Motor Vehicle body 91,159 73,280 Hardware 15,680 15,209 Total $ 466,738 $ 401,579 Three Months Ended (in thousands) April 1, 2023 March 26, 2022 Net sales to U.S. customers $ 430,693 $ 373,618 Net sales to non-U.S. customers 36,045 27,961 Total $ 466,738 $ 401,579 |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Apr. 01, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation Restricted Stock Awards (“RSAs”) and Restricted Stock Units (“RSUs”) We issue RSAs and RSUs to participants in our equity plans in the form of time-based RSAs and RSUs and performance-based RSAs and RSUs. Compensation cost related to RSA and RSU grants was $1.7 million and $1.6 million for the three months ended April 1, 2023 and March 26, 2022, respectively, and was included in selling, general and administrative expenses in the Condensed Consolidated Statements of Operations. The following table summarizes our RSA and RSU activity for the three months ended April 1, 2023: Shares Weighted Balance at December 31, 2022 238,922 $ 92.07 Granted 93,944 $ 98.02 Vested (59,382) $ 77.02 Canceled (8,392) $ 81.56 Balance at April 1, 2023 265,092 $ 97.88 For the three months ended April 1, 2023, we granted 29,399 performance-based RSUs with a grant date fair value of $113.15 per share. For the three months ended March 26, 2022, we granted 23,995 performance-based RSUs with a grant date fair value of $111.31 per share. As of April 1, 2023, there was $20.2 million of unrecognized compensation cost related to unvested RSA and RSU grants that is expected to be recognized over a weighted average period of 2.6 years. Stock Options We grant stock options to participants in our equity plans. Compensation cost related to stock option grants was $0.4 million for both the three months ended April 1, 2023 and March 26, 2022, and was included as selling, general and administrative expenses in the Condensed Consolidated Statements of Operations. The following table summarizes our stock option activity for the three months ended April 1, 2023 : Shares Weighted Weighted Aggregate Balance at December 31, 2022 268,119 $ 84.03 Granted 76,784 $ 91.28 Canceled (1,113) $ 96.36 Exercised (21,702) $ 72.85 Balance at April 1, 2023 322,088 $ 86.47 6.1 $ 1,935 Exercisable at April 1, 2023 133,913 $ 80.31 5.0 $ 1,398 As of April 1, 2023, there was $5.7 million of unrecognized compensation cost related to unvested stock options that is expected to be recognized over a weighted average period of 3.2 years. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Apr. 01, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic earnings per share was calculated by dividing our net income by the weighted average number of common shares outstanding during the period, excluding unvested RSAs which are considered to be contingently issuable. To calculate diluted earnings per share, common share equivalents are added to the weighted average number of common shares outstanding. Common share equivalents are calculated using the treasury stock method and are computed based on outstanding stock-based awards. For the three months ended April 1, 2023 and March 26, 2022, there were approximately 237,000 shares and 27,000 shares, respectively, that were excluded from the calculation of diluted earnings per share because their effect would have been anti-dilutive. The following table sets forth the computation of basic earnings per share and diluted earnings per share: Three Months Ended (in thousands, except per share data) April 1, 2023 March 26, 2022 Net income $ 5,683 $ 35,207 Denominator: Weighted average basic shares outstanding 31,436 31,499 Effect of stock-based compensation awards 101 102 Weighted average diluted shares outstanding 31,537 31,601 Earnings Per Share: Basic $ 0.18 $ 1.12 Diluted $ 0.18 $ 1.11 |
Common Stock Repurchases
Common Stock Repurchases | 3 Months Ended |
Apr. 01, 2023 | |
Common Stock Repurchases [Abstract] | |
Common Stock Repurchases | Common Stock Repurchases We periodically repurchase, at the then current market price, and cancel common stock issued to the Dorman Products, Inc. 401(k) Retirement Plan and Trust (the “401(k) Plan”). 401(k) Plan participants can no longer purchase shares of Dorman common stock as an investment option under the 401(k) Plan. Shares are generally purchased by the Company from the 401(k) Plan when participants sell units as permitted by the 401(k) Plan or elect to leave the 401(k) Plan upon retirement, termination or other reasons. The following table summarizes the repurchase and cancellation of common stock by the Company for the periods indicated: Three Months Ended April 1, 2023 March 26, 2022 Shares repurchased and canceled 5,125 12,764 Total cost of shares repurchased and canceled (in thousands) $ 434 $ 1,388 Average price per share $ 84.62 $ 108.74 Separately, our Board of Directors has authorized the repurchase of up to $600 million of our common stock through December 31, 2024 under a previously announced share repurchase program and subsequent authorizations. Under this program, share repurchases may be made from time to time depending on market conditions, share price, share availability and other factors at our discretion. The share repurchase program does not obligate us to acquire any specific number of shares. At April 1, 2023, $228.0 million was available for repurchase under this share repurchase program. The following table summarizes the repurchase and cancellation of common stock under the share repurchase program: Three Months Ended April 1, 2023 March 26, 2022 Shares repurchased and canceled — 98,350 Total cost of shares repurchased and canceled (in thousands) $ — $ 9,529 Average price per share $ — $ 96.89 |
Income Taxes
Income Taxes | 3 Months Ended |
Apr. 01, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income TaxesAt April 1, 2023, we had $3.4 million of net unrecognized tax benefits, all of which would lower our effective tax rate if recognized. We recognize interest and penalties related to uncertain tax positions in income tax expense. As of April 1, 2023, accrued interest and penalties related to uncertain tax positions were not material. We file income tax returns in the United States, Canada, China, India, and Mexico. The statute of limitations for tax years before 2019 is closed for U.S. federal income tax purposes. The statute of limitations for tax years before 2018 is closed for the states in which we file. The statute of limitations for tax years before 2019 is closed for income tax purposes in Canada, China, and India. The statute of limitations for tax years before 2017 is closed for income tax purposes in Mexico. |
Related-Party Transactions
Related-Party Transactions | 3 Months Ended |
Apr. 01, 2023 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | Related-Party TransactionsWe lease our Colmar, PA facility and a portion of our Lewisberry, PA facility from entities in which Steven L. Berman, our Non-Executive Chairman, and certain of his family members are owners. Each lease is a non-cancelable operating lease. Total rental payments to those entities under these lease arrangements will be $2.9 million in fiscal 2023 and were $2.5 million in fiscal 2022. The lease for our corporate headquarters in Colmar, PA was renewed in December 2022, effective as of January 1, 2023, and will expire on December 31, 2027. The lease for our Lewisberry, PA operating facility was signed in September 2020 and will expire on December 31, 2027.We are a partner in a joint venture with one of our suppliers and own a minority interest in two other suppliers. Two of these investments are accounted for under the equity method and one is accounted for under the cost method. |
Fair Value Disclosures
Fair Value Disclosures | 3 Months Ended |
Apr. 01, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures | Fair Value DisclosuresThe carrying value of financial instruments such as cash and cash equivalents, accounts receivable, accounts payable, and other current assets and liabilities approximate their fair value based on the short-term nature of these instruments. The carrying value of borrowings under our credit facility approximates fair value because borrowings under our credit facility bear interest at rates indexed to a market rate (Term SOFR). |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Apr. 01, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Estimated Fair Values of Assets Acquired and Liabilities Assumed | The table below details the fair values of the assets acquired and the liabilities assumed at the acquisition date, including applicable measurement period adjustments: (in thousands) Accounts receivable $ 3,317 Inventories 90,428 Prepaids and other current assets 5,293 Property, plant and equipment 23,776 Goodwill 247,474 Identifiable intangible assets 157,500 Operating lease right-of-use assets 11,661 Other Assets 3,001 Accounts payable (7,436) Accrued compensation (2,086) Accrued customer rebates and returns (1,609) Other current liabilities (8,726) Long-term operating lease liabilities (9,508) Other long-term liabilities (3,307) Net cash consideration $ 509,778 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Apr. 01, 2023 | |
Inventory Disclosure [Abstract] | |
Summary of Inventories | Inventories include the cost of material, freight, direct labor and overhead utilized in the processing of our products and are stated at the lower of cost or net realizable value. Inventories were as follows: (in thousands) April 1, 2023 December 31, 2022 Raw materials $ 30,839 $ 34,267 Bulk product 200,491 234,871 Finished product 446,544 478,032 Packaging materials 9,075 8,731 Total $ 686,949 $ 755,901 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Apr. 01, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Goodwill included the following: (in thousands) Balance at December 31, 2022 $ 443,035 Measurement period adjustments for SuperATV acquisition 233 Foreign currency translation 68 Balance at April 1, 2023 $ 443,336 |
Schedule of Intangible Assets | Intangible assets included the following: April 1, 2023 December 31, 2022 Intangible assets subject to amortization Gross Carrying Value Accumulated Amortization Net Carrying Value Gross Carrying Value Accumulated Amortization Net Carrying Value (in thousands) Customer relationships $ 175,430 $ 24,156 $ 151,274 $ 175,430 $ 21,643 $ 153,787 Trade names 67,690 7,469 60,221 67,690 6,370 61,320 Product Portfolio 107,800 4,644 103,156 107,800 2,953 104,847 Technology 2,167 882 1,285 2,167 820 1,347 Patents and Other 1,430 367 1,063 1,430 322 1,108 Total $ 354,517 $ 37,518 $ 316,999 $ 354,517 $ 32,108 $ 322,409 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Apr. 01, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Disaggregated Revenue | The following tables present our disaggregated revenue by type of major good / product line, and geography. Three Months Ended (in thousands) April 1, 2023 March 26, 2022 Powertrain $ 171,035 $ 152,228 Chassis 188,864 160,862 Motor Vehicle body 91,159 73,280 Hardware 15,680 15,209 Total $ 466,738 $ 401,579 Three Months Ended (in thousands) April 1, 2023 March 26, 2022 Net sales to U.S. customers $ 430,693 $ 373,618 Net sales to non-U.S. customers 36,045 27,961 Total $ 466,738 $ 401,579 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Apr. 01, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of RSA and RSU Activity | The following table summarizes our RSA and RSU activity for the three months ended April 1, 2023: Shares Weighted Balance at December 31, 2022 238,922 $ 92.07 Granted 93,944 $ 98.02 Vested (59,382) $ 77.02 Canceled (8,392) $ 81.56 Balance at April 1, 2023 265,092 $ 97.88 |
Summary of Stock Option Activity | The following table summarizes our stock option activity for the three months ended April 1, 2023 : Shares Weighted Weighted Aggregate Balance at December 31, 2022 268,119 $ 84.03 Granted 76,784 $ 91.28 Canceled (1,113) $ 96.36 Exercised (21,702) $ 72.85 Balance at April 1, 2023 322,088 $ 86.47 6.1 $ 1,935 Exercisable at April 1, 2023 133,913 $ 80.31 5.0 $ 1,398 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Apr. 01, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Basic Earnings per Share and Diluted Earnings per Share | The following table sets forth the computation of basic earnings per share and diluted earnings per share: Three Months Ended (in thousands, except per share data) April 1, 2023 March 26, 2022 Net income $ 5,683 $ 35,207 Denominator: Weighted average basic shares outstanding 31,436 31,499 Effect of stock-based compensation awards 101 102 Weighted average diluted shares outstanding 31,537 31,601 Earnings Per Share: Basic $ 0.18 $ 1.12 Diluted $ 0.18 $ 1.11 |
Common Stock Repurchases (Table
Common Stock Repurchases (Tables) | 3 Months Ended |
Apr. 01, 2023 | |
Common Stock Repurchases [Abstract] | |
Summary of Shares Repurchase and Cancellation | The following table summarizes the repurchase and cancellation of common stock by the Company for the periods indicated: Three Months Ended April 1, 2023 March 26, 2022 Shares repurchased and canceled 5,125 12,764 Total cost of shares repurchased and canceled (in thousands) $ 434 $ 1,388 Average price per share $ 84.62 $ 108.74 Three Months Ended April 1, 2023 March 26, 2022 Shares repurchased and canceled — 98,350 Total cost of shares repurchased and canceled (in thousands) $ — $ 9,529 Average price per share $ — $ 96.89 |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Oct. 04, 2022 | Apr. 01, 2023 | Mar. 26, 2022 | |
Business Acquisition [Line Items] | |||
Business acquisition, purchase price | $ (267) | $ (595) | |
Super ATV LLC | |||
Business Acquisition [Line Items] | |||
Business acquisition, percentage of outstanding stock acquired | 100% | ||
Business acquisition, purchase price | $ 509,800 | ||
Business acquisition, net of acquired cash | 6,800 | ||
Potential earn-out payment | $ 100,000 | ||
Cash as proceeds | $ (300) |
Acquisitions - Schedule of Esti
Acquisitions - Schedule of Estimated Fair Values of Assets Acquired and Liabilities Assumed (Detail) - USD ($) $ in Thousands | Apr. 01, 2023 | Dec. 31, 2022 | Oct. 04, 2022 |
Business Acquisition [Line Items] | |||
Goodwill | $ 443,336 | $ 443,035 | |
Super ATV LLC | |||
Business Acquisition [Line Items] | |||
Accounts receivable | $ 3,317 | ||
Inventories | 90,428 | ||
Prepaids and other current assets | 5,293 | ||
Property, plant and equipment | 23,776 | ||
Goodwill | 247,474 | ||
Identifiable intangible assets | 157,500 | ||
Operating lease right-of-use assets | 11,661 | ||
Other Assets | 3,001 | ||
Accounts payable | (7,436) | ||
Accrued compensation | (2,086) | ||
Accrued customer rebates and returns | (1,609) | ||
Other current liabilities | (8,726) | ||
Long-term operating lease liabilities | (9,508) | ||
Other long-term liabilities | (3,307) | ||
Net cash consideration | $ 509,778 |
Sales of Accounts Receivable -
Sales of Accounts Receivable - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 01, 2023 | Mar. 26, 2022 | |
Sale Of Accounts Receivable [Line Items] | ||
Sale of accounts receivable | $ 237,700 | $ 275,200 |
Selling, general and administrative expenses | 126,363 | 86,528 |
Accounts Receivable Sales Programs | ||
Sale Of Accounts Receivable [Line Items] | ||
Selling, general and administrative expenses | $ 13,500 | $ 4,900 |
Inventories - Summary of Invent
Inventories - Summary of Inventories (Detail) - USD ($) $ in Thousands | Apr. 01, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 30,839 | $ 34,267 |
Bulk product | 200,491 | 234,871 |
Finished product | 446,544 | 478,032 |
Packaging materials | 9,075 | 8,731 |
Total | $ 686,949 | $ 755,901 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Schedule of Goodwill (Detail) $ in Thousands | 3 Months Ended |
Apr. 01, 2023 USD ($) | |
Goodwill [Roll Forward] | |
Balance at December 31, 2022 | $ 443,035 |
Measurement period adjustments for SuperATV acquisition | 233 |
Foreign currency translation | 68 |
Balance at April 1, 2023 | $ 443,336 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Schedule of Intangible Assets (Detail) - USD ($) $ in Thousands | Apr. 01, 2023 | Dec. 31, 2022 |
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $ 354,517 | $ 354,517 |
Accumulated Amortization | 37,518 | 32,108 |
Net Carrying Value | 316,999 | 322,409 |
Customer relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 175,430 | 175,430 |
Accumulated Amortization | 24,156 | 21,643 |
Net Carrying Value | 151,274 | 153,787 |
Trade names | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 67,690 | 67,690 |
Accumulated Amortization | 7,469 | 6,370 |
Net Carrying Value | 60,221 | 61,320 |
Product Portfolio | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 107,800 | 107,800 |
Accumulated Amortization | 4,644 | 2,953 |
Net Carrying Value | 103,156 | 104,847 |
Technology | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 2,167 | 2,167 |
Accumulated Amortization | 882 | 820 |
Net Carrying Value | 1,285 | 1,347 |
Patents and Other | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 1,430 | 1,430 |
Accumulated Amortization | 367 | 322 |
Net Carrying Value | $ 1,063 | $ 1,108 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 01, 2023 | Mar. 26, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 5.5 | $ 3 |
Debt - Additional Information (
Debt - Additional Information (Detail) | Apr. 01, 2023 | Dec. 31, 2022 |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Credit facility, outstanding borrowing interest rate | 6.41% | 5.78% |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) $ in Millions | 3 Months Ended |
Apr. 01, 2023 USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Maximum contingency payable | $ 100 |
Estimated contingent payments | 20.5 |
Increase in contingent consideration accrual | $ 0.5 |
Revenue Recognition - Summary o
Revenue Recognition - Summary of Disaggregated Revenue (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 01, 2023 | Mar. 26, 2022 | |
Disaggregation Of Revenue [Line Items] | ||
Total | $ 466,738 | $ 401,579 |
Net sales to U.S. customers | ||
Disaggregation Of Revenue [Line Items] | ||
Total | 430,693 | 373,618 |
Net sales to non-U.S. customers | ||
Disaggregation Of Revenue [Line Items] | ||
Total | 36,045 | 27,961 |
Powertrain | ||
Disaggregation Of Revenue [Line Items] | ||
Total | 171,035 | 152,228 |
Chassis | ||
Disaggregation Of Revenue [Line Items] | ||
Total | 188,864 | 160,862 |
Motor Vehicle body | ||
Disaggregation Of Revenue [Line Items] | ||
Total | 91,159 | 73,280 |
Hardware | ||
Disaggregation Of Revenue [Line Items] | ||
Total | $ 15,680 | $ 15,209 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Apr. 01, 2023 | Mar. 26, 2022 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Granted (in shares) | 93,944 | |
Weighted-average grant-date fair value (in dollars per share) | $ 98.02 | |
Compensation cost related to stock options | $ 400 | $ 400 |
RSA and RSU | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Compensation cost related to restricted stock | 1,700 | $ 1,600 |
Unrecognized compensation cost related to non-vested restricted stock | $ 20,200 | |
Unrecognized compensation cost related to non-vested restricted stock, weighted-average period | 2 years 7 months 6 days | |
Performance-Based Restricted Stock Units | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Granted (in shares) | 29,399 | 23,995 |
Weighted-average grant-date fair value (in dollars per share) | $ 113.15 | $ 111.31 |
Share-Based Payment Arrangement, Option | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Unrecognized compensation cost related to non-vested restricted stock | $ 5,700 | |
Unrecognized compensation cost related to non-vested restricted stock, weighted-average period | 3 years 2 months 12 days |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of RSA and RSU Activity (Detail) | 3 Months Ended |
Apr. 01, 2023 $ / shares shares | |
Shares | |
Beginning balance (in shares) | shares | 238,922 |
Granted (in shares) | shares | 93,944 |
Vested (in shares) | shares | (59,382) |
Canceled (in shares) | shares | (8,392) |
Ending balance (in shares) | shares | 265,092 |
Weighted Average Fair Value | |
Beginning balance, weighted average fair value (in dollars per share) | $ / shares | $ 92.07 |
Granted (in dollars per share) | $ / shares | 98.02 |
Vested (in dollars per share) | $ / shares | 77.02 |
Canceled (in dollars per share) | $ / shares | 81.56 |
Ending balance, weighted average fair value (in dollars per share) | $ / shares | $ 97.88 |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of Stock Option Activity (Detail) $ / shares in Units, $ in Thousands | 3 Months Ended |
Apr. 01, 2023 USD ($) $ / shares shares | |
Shares | |
Beginning balance (in shares) | shares | 268,119 |
Granted (in shares) | shares | 76,784 |
Canceled (in shares) | shares | (1,113) |
Exercised (in shares) | shares | (21,702) |
Ending balance (in shares) | shares | 322,088 |
Exercisable (in shares) | shares | 133,913 |
Weighted Average Fair Value | |
Beginning balance, weighted average exercise price (in dollars per share) | $ / shares | $ 84.03 |
Granted (in dollars per share) | $ / shares | 91.28 |
Canceled (in dollars per share) | $ / shares | 96.36 |
Exercised (in dollars per share) | $ / shares | 72.85 |
Ending balance, weighted average exercise price (in dollars per share) | $ / shares | 86.47 |
Exercisable (in dollars per share) | $ / shares | $ 80.31 |
Weighted average remaining term | 6 years 1 month 6 days |
Weighted average remaining term, exercisable | 5 years |
Aggregate intrinsic value | $ | $ 1,935 |
Aggregate intrinsic value, exercisable | $ | $ 1,398 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Detail) - shares | 3 Months Ended | |
Apr. 01, 2023 | Mar. 26, 2022 | |
Earnings Per Share [Abstract] | ||
Stock-based awards considered as anti-dilutive | 237,000 | 27,000 |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Computation of Basic Earnings per Share and Diluted Earnings per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Apr. 01, 2023 | Mar. 26, 2022 | |
Earnings Per Share [Abstract] | ||
Net income | $ 5,683 | $ 35,207 |
Denominator: | ||
Weighted average shares outstanding, basic (in shares) | 31,436 | 31,499 |
Effect of stock-based compensation awards (in shares) | 101 | 102 |
Weighted average shares outstanding, diluted (in shares) | 31,537 | 31,601 |
Earnings Per Share: | ||
Earning per share, basic (in dollars per share) | $ 0.18 | $ 1.12 |
Earning per share, diluted (in dollars per share) | $ 0.18 | $ 1.11 |
Common Stock Repurchases - Summ
Common Stock Repurchases - Summary of Shares Repurchase and Cancellation (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Apr. 01, 2023 | Mar. 26, 2022 | |
Common Stock Repurchases | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares repurchased and canceled (in shares) | 5,125 | 12,764 |
Total cost of shares repurchased and canceled (in thousands) | $ 434 | $ 1,388 |
Average price per share (in dollars per share) | $ 84.62 | $ 108.74 |
Share Repurchase Program | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares repurchased and canceled (in shares) | 0 | 98,350 |
Total cost of shares repurchased and canceled (in thousands) | $ 0 | $ 9,529 |
Average price per share (in dollars per share) | $ 0 | $ 96.89 |
Common Stock Repurchases - Addi
Common Stock Repurchases - Additional Information (Detail) - Share Repurchase Program | Apr. 01, 2023 USD ($) |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share repurchase program shares authorized to be repurchased (in shares) | $ 600,000,000 |
Shares available for repurchase under share repurchase program amount | $ 228,000,000 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) $ in Millions | Apr. 01, 2023 USD ($) |
Income Tax Disclosure [Abstract] | |
Net unrecognized tax benefits | $ 3.4 |
Related-Party Transactions - Ad
Related-Party Transactions - Additional Information (Detail) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Apr. 01, 2023 Investment Supplier | Jul. 01, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Related Party Transaction [Line Items] | |||
Rental payments based upon the terms of the lease | $ | $ 2.5 | ||
Joint Venture | |||
Related Party Transaction [Line Items] | |||
Number of suppliers with company partners Joint Venture | Supplier | 1 | ||
Minority interest investments in number of suppliers | Supplier | 2 | ||
Number of investments accounted for under equity method | Investment | 2 | ||
Number of investments accounted for under cost method | Investment | 1 | ||
Scenario, Forecast | |||
Related Party Transaction [Line Items] | |||
Rental payments based upon the terms of the lease | $ | $ 2.9 |