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 Fourth Quarter
and Year Ended December 30, 2006
Colmar, Pennsylvania (February 23, 2007) - Dorman Products, Inc.,
(NASDAQ:DORM) (formerly R&B, Inc. NASDAQ: RBIN) today announced financial
results for the fourth quarter and year ended December 30, 2006. The Company
operates on a fifty-two, fifty-three week period ending on the last Saturday of
the calendar year. As a result, fourth quarter 2005 results are for 14 weeks and
fiscal 2005 includes 53 weeks while the current year results are for 13 and 52
weeks, respectively.
Sales increased 5% to $77.9 million for the fourth quarter ended
December 30, 2006 from $74.5 million in the same period last year despite one
less selling week in the current year. Sales for the year ended December 30,
2006 increased 6% to $295.8 million from $278.1 million in the same period last
year. Revenue growth was driven primarily by increased sales from new products.
Net income in the fourth quarter of 2006 was $4.9 million compared to
net income of $4.4 million in the same period last year. Diluted earnings per
share in the fourth quarter increased 13% to $0.27 from $0.24 in the same period
last year.
Results for the year ended December 30, 2006 include a one-time $3.2
million non-cash write-down for goodwill impairment ($2.9 million or $0.16 per
share) and the write off of deferred tax benefits ($0.3 million or $0.02 per
share) associated with the Company's Swedish subsidiary (Scan-Tech). The
charges, which are not tax deductible, were the result of a second quarter
review of the Scan-Tech business in response to bad debt charge offs at two
large customers and the resulting loss of those customers in the first half of
the year.
Excluding the goodwill impairment and deferred tax write off, net
income for the year was $17.0 million compared to net income of $17.1 million
last year and fully diluted EPS for year were $0.94 compared to $0.93 last year.
Reported net income for the year ended December 30, 2006 was $13.8 million
compared to net income of $17.1 million in the same period last year. Reported
diluted earnings per share for the year ended December 30, 2006 decreased to
$0.76 from $0.93 in the same period last year.
Effective January 1, 2006, the Company adopted SFAS No. 123R,
"Share-Based Payment" and related interpretations and began expensing the grant
date fair value of employee stock options. Prior to January 1, 2006, the Company
applied Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued
to Employees," and related interpretations in accounting for its stock option
plans. Accordingly, no compensation expense was recognized in net income for
employee stock options in the prior year. The Company adopted SFAS No. 123R
using the modified prospective transition method and therefore has not restated
prior periods. The impact of adopting SFAS No. 123R in 2006 reduced diluted
earnings per share for the year by $0.02.
Mr. Richard Berman, Chairman, President and Chief Executive Officer
said, "Stronger fourth quarter orders resulted in solid revenue growth after
adjusting for last year's 14-week quarter. The higher sales level enabled us to
better leverage our expenses, which is necessary to offset the impact that a
shifting mix to higher priced but lower margin hard parts has on reducing our
gross margin. We remain committed to making the right investments to ensure new
product leadership in all of our markets. Dorman will continue to be the leader
in new product development for the automotive aftermarket."
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
automotive parts and hardware are marketed under the OE Solutions(TM), HELP!(R),
AutoGrade(TM), First Stop(TM), Conduct-Tite(R), Pik-A-Nut(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 cause actual
results to differ materially include, but are not limited to, those factors
discussed in the Company's 2005 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 14 Weeks
Fourth Quarter (unaudited) 12/30/06 Pct. 12/31/05 Pct.
Net sales $77,882 100.0 $74,492 100.0
Cost of goods sold 51,958 66.7 49,042 65.8
Gross profit 25,924 33.3 25,450 34.2
Selling, general and
administrative expenses 17,448 22.4 17,771 23.9
Income from operations 8,476 10.9 7,679 10.3
Interest expense, net 470 0.6 654 0.9
Income before income taxes 8,006 10.3 7,025 9.4
Provision for income taxes 3,092 4.0 2,643 3.5
Net income $ 4,914 6.3 $ 4,382 5.9
Earnings per share
Basic $ 0.28 - $ 0.24 -
Diluted $ 0.27 - $ 0.24 -
Average shares outstanding
Basic 17,704 - 17,913 -
Diluted 18,113 - 18,394 -
52 Weeks 53 Weeks
Year-to-Date 12/30/06 Pct. 12/31/05 Pct.
Net sales $295,825 100.0 $278,117 100.0
Cost of goods sold 192,348 65.0 179,253 64.5
Gross profit 103,447 35.0 98,864 35.5
Selling, general and
administrative expenses 73,810 25.0 69,088 24.8
Goodwill impairment 2,897 1.0 - -
Income from operations 26,770 9.0 29,776 10.7
Interest expense, net 2,267 0.7 2,615 0.9
Income before income taxes 24,503 8.3 27,161 9.8
Provision for income taxes 10,704 3.6 10,084 3.7
Net income $13,799 4.7 $17,077 6.1
Earnings per share
Basic $ 0.78 - $ 0.95 -
Diluted $ 0.76 - $ 0.93 -
Average shares outstanding
Basic 17,722 - 17,914 -
Diluted 18,139 - 18,437 -
DORMAN PRODUCTS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands)
12/30/06 12/31/05
Assets:
Cash and cash equivalents $ 5,080 $ 2,944
Accounts receivable 77,187 64,778
Inventories 67,768 75,535
Deferred income taxes 10,330 9,560
Prepaid expenses 1,443 1,545
Total current assets 161,808 154,362
Property & equipment 27,963 27,473
Goodwill 26,958 29,617
Other assets 1,029 704
Total assets $217,758 $212,156
Liability & Shareholders' Equity:
Current portion of long-term debt $ 8,651 $ 8,571
Accounts payable 12,822 14,739
Accrued expenses and other 13,531 15,240
Total current liabilities 35,004 38,550
Long-term debt and other 20,596 27,869
Deferred income taxes 8,315 7,195
Shareholders' equity 153,843 138,542
Total Liabilities and Equity $217,758 $212,156
Selected Cash Flow Information:
(in thousands) Quarter Ended (unaudited) Year Ended
12/30/06 12/3105 12/30/06 12/31/05
Depreciation and
amortization $ 1,812 $1,580 $ 6,824 $5,774
Capital Expenditures $ 1,846 $1,698 $ 7,278 $7,220
DORMAN PRODUCTS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Measures
(in thousands, except per-share amounts)
During the second quarter of 2006 the Company recorded a $3.2 million non-cash
write-down for goodwill impairment ($2.9 million) and the write off of deferred
tax benefits ($0.3 million) associated with the Company's Swedish operation
(Scan-Tech). This press release contains non-GAAP measures which adjust current
year net income and fully diluted earnings per share to exclude the impact of
these charges. 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 fully diluted earnings per share
follows:
Year Ended
________________________________________________
12/31/06 12/31/05 % Change
Net Income, as reporte $ 13,799 $ 17,077 -19.2%
Add:Goodwill and asset
impairment charge 3,216 - N/A
------------------------------------------------
Net income, as adjusted $ 17,015 $ 17,077 -0.4%
------------------------------------------------
Fully diluted EPS,
as reported $ 0.76 $ 0.93 -18.3%
Add: Goodwill and asset
impairment charge 0.18 - N/A
-----------------------------------------------
Fully diluted EPS,
as adjusted $ 0.94 $ 0.93 1.1%