NEW RELEASE
DORMAN
NEW SINCE 1918
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 First Quarter Ended
March 29, 2008
Colmar, Pennsylvania (May 2, 2008) - Dorman Products, Inc.,
(NASDAQ:DORM) today announced financial results for the first quarter ended
March 29, 2008.
Sales increased 8% to $80.1 million for the first quarter ended March
29, 2008 from $74.3 million last year. Revenues were up primarily as a result of
higher new product sales.
Reported net income in the first quarter of 2008 was $2.7 million
compared to net income of $4.1 million in the same period last year. Reported
diluted earnings per share in the first quarter were $0.15 compared to $0.22 in
the same period last year. Prior year results include a $0.01 per share benefit
from a reduction in vacation expense as a result of a change in our vacation
policy. Excluding the impact of this adjustment, net income in the first quarter
of 2008 was $2.7 million compared to net income of $3.8 million in the same
period last year and diluted EPS in the first quarter of 2008 decreased to $0.15
from $0.21 in the same period last year.
For the thirteen weeks ended March 29, 2008 and March 31, 2007:
o Gross profit margin was 30.8% compared to 34.7% in the prior year.
The decline in margin resulted from higher material costs caused
by commodity price increases and general weakness in the U.S.
dollar, an increase in customer allowances and returns and a $0.8
million increase in air freight costs necessary to expedite
product to fill customer orders.
o Selling, general and administrative expenses increased 6% over the
prior year. The increase is the result of higher variable costs
related to our sales growth and increased staffing levels to
support higher levels of new product development. These increases
were partially offset by lower incentive compensation expense due
to lower earnings levels in the current year.
o Interest expense, net, decreased to $0.3 million from $0.5 million
due to lower interest rates.
o Our effective tax rate increased to 39.7% in the thirteen weeks
ended March 29, 2008 from 37.2% in the same period last year. The
increase is the result of the loss of certain state tax benefits
and a $0.1 million charge to provide a valuation allowance against
deferred tax assets of our Canadian subsidiary.
Mr. Richard Berman, Chairman and Chief Executive Officer said, "It was
good to see positive organic sales growth in an aftermarket that is generally
flat. We continue to follow our long term growth plan to grow market share and
customer satisfaction. Our recent price increases have not offset all of our
cost increases, and in the first quarter we incurred substantial operating
expenses such as air freight and overtime to ensure high service levels. We
continue to build depth in our capability to introduce new product, accommodate
continually increasing customer demands, and position ourselves to exploit
opportunities that will likely arise in a tougher market. Though we are
disappointed in the first quarter earnings, we remain committed and optimistic
about the long-term success of our strategy."
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 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 2006 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
First Quarter (unaudited) 03/29/08 Pct. 03/31/07 Pct.
-------- ------ -------- ------
Net sales $80,125 100.0 $74,293 100.0
Cost of goods sold 55,422 69.2 48,517 65.3
Gross profit 24,703 30.8 25,776 34.7
Selling, general and
administrative expenses 19,984 24.9 18,785 25.3
Income from operations 4,719 5.9 6,991 9.4
Interest expense, net 268 0.3 527 0.7
Income before income taxes 4,451 5.6 6,464 8.7
Provision for income taxes 1,769 2.3 2,402 3.2
Net income $ 2,682 3.3 $ 4,062 5.5
Earnings per share
Basic $ 0.15 - $ 0.23 -
Diluted $ 0.15 - $ 0.22 -
Average shares outstanding
Basic 17,699 - 17,689 -
Diluted 18,087 - 18,099 -
DORMAN PRODUCTS, INC. stocktickerAND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
(in thousands)
03/29/08 12/29/07
-------- --------
Assets:
Cash and cash equivalents $ 6,899 $ 6,918
Accounts receivable 84,402 76,897
Inventories 84,810 80,565
Deferred income taxes 10,209 10,111
Prepaid expenses 1,566 1,921
Total current assets 187,866 176,412
Property & equipment 25,365 25,680
Goodwill 26,642 26,662
Other assets 1,688 1,901
Total assets $241,581 $230,655
Liability & Shareholders' Equity:
Current portion of long-term debt $ 8,655 $ 8,654
Accounts payable 19,936 18,752
Accrued expenses and other 7,318 10,718
Total current liabilities 35,909 38,124
Long-term debt and other 20,040 10,811
Deferred income taxes 8,152 7,862
Shareholders' equity 177,480 173,858
Total Liabilities and Equity $241,581 $230,655
Selected Cash Flow Information:
(in thousands) 13 Weeks (unaudited)
--------------------
03/29/08 03/31/07
Depreciation and
amortization $ 1,929 $1,863
Capital Expenditures $ 1,535 $1,242
DORMAN PRODUCTS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Measures
(in thousands, except per-share amounts)
This press release contains non-GAAP measures which adjust net income and
diluted earnings per share to exclude the impact of the following item:
- Effective December 31, 2006, we changed our vacation policy so that
vacation is earned ratably throughout the year rather than at the end
of the preceding year. This change resulted in a reduction in our
vacation accrual of $1.8 million in 2007, $0.4 of which was recorded in
the three months ended March 31, 2007.
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 diluted earnings per share
follows:
13 Weeks (unaudited)
---------------------------------------
03/29/08 03/31/07 % Change
Net income, as reported $ 2,682 $ 4,062 -34.0%
Less: Vacation adjustment, net of tax - (249) N/A
_______________________________________
Net income, as adjusted $ 2,682 $ 3,813 -29.7%
_______________________________________
Diluted EPS, as reported $ 0.15 $ 0.22 -31.8%
Less: Vacation adjustment, net of tax - (0.01) N/A
______________________________________
Diluted EPS, as adjusted $ 0.15 $ 0.21 -28.6%