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 28, 2008
Colmar, Pennsylvania (August 1, 2008) - Dorman Products, Inc.
(NASDAQ:DORM) today announced financial results for the second quarter ended
June 28, 2008.
Sales increased 5% to $90.3 million for the three months ended June 28,
2008 from $85.8 million last year. Revenues for the six months ended June 28,
2008 were up 6% to $170.4 million from $160.1 million last year. The favorable
effect of foreign currency exchange and the acquisition of the Consumer Division
of Rockford Products Corporation accounted for approximately 3% of the net sales
increase in both periods. The remaining increase is primarily the result of
increased revenues from new product sales.
Reported net income in the second quarter of 2008 was $5.2 million
compared to net income of $5.8 million in the same period last year. Reported
diluted earnings per share in the second quarter of 2008 were $0.29 compared to
$0.32 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
second quarter of 2008 was $5.2 million compared to net income of $5.5 million
in the same period last year and diluted EPS in the second quarter of 2008
decreased to $0.29 from $0.31 in the same period last year.
For the thirteen weeks ended June 28, 2008 and June 30, 2007:
o Gross profit margin was 33.4% compared to 33.9% in the prior year
The decrease is primarily the result of higher material
costs caused by higher commodity price increases and weakness in
the U.S. dollar
o Selling, general and administrative expenses for the thirteen
weeks ended June 28, 2008 increased 12% to $21.5 million from
$19.2 million in the same period last year. The increase is the
result of higher variable costs related to our sales growth and
increased staffing levels in product development, engineering and
quality control. Results for the thirteen weeks ended June 30,
2007 also include a $0.3 million reduction in vacation expense due
to the vacation policy change mentioned above.
o Interest expense, net, decreased to $0.3 million from $0.5 million
due to lower interest rates.
o Our effective tax rate decreased to 37.8% in the thirteen weeks
ended June 28, 2008 from 38.1% in the same period last year. The
decrease is primarily the result of the reversal of reserves upon
completion of the audit of our 2005 tax year by the Internal
Revenue Service.
Reported net income in the first six months of 2008 was $7.9 million
compared to net income of $9.8 million in the same period last year. Reported
diluted earnings per share in the six months ended June 30, 2008 were $0.44
compared to $0.54 in the same period last year. Excluding the vacation
adjustment discussed below, net income in the first six months of 2008 was $7.9
million compared to net income of $9.3 million in the same period last year and
diluted EPS for the first six months of 2008 decreased to $0.44 from $0.52 in
the same period last year.
Mr. Richard Berman, Chairman and Chief Executive Officer, said, "Sales
growth in the quarter was 5% due to challenging aftermarket conditions. We also
saw further increases in costs from rising commodity prices and the weak dollar
that have not been offset by selling price increases. These factors combined to
result in a decline in second quarter earnings. Our balance sheet is strong and
we remain confident in the long-term success of our business despite these short
term setbacks. We remain committed to maintaining our leadership position in
aftermarket with innovative new products and solutions for our customers and end
users."
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),
Second 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 2007 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) 06/28/08 Pct. 06/30/07 Pct.
Net sales $90,311 100.0 $85,796 100.0
Cost of goods sold 60,146 66.6 56,726 66.1
Gross profit 30,165 33.4 29,070 33.9
Selling, general and
administrative expenses 21,469 23.8 19,225 22.4
Income from operations 8,696 9.6 9,845 11.5
Interest expense, net 285 0.3 512 0.6
Income before income taxes 8,411 9.3 9,333 10.9
Provision for income taxes 3,178 3.5 3,565 4.2
Net income $ 5,233 5.8 $ 5,768 6.7
Earnings per share
Basic $ 0.30 - $ 0.33 -
Diluted $ 0.29 - $ 0.32 -
Average shares outstanding
Basic 17,692 - 17,688 -
Diluted 18,041 - 18,129 -
26 Weeks 26 Weeks
Year to Date (unaudited) 06/28/08 Pct. 06/30/07 Pct.
Net sales $170,436 100.0 $160,089 100.0
Cost of goods sold 115,568 67.8 105,243 65.7
Gross profit 54,868 32.2 54,846 34.3
Selling, general and
administrative expenses 41,453 24.3 38,010 23.8
Income from operations 13,415 7.9 16,836 10.5
Interest expense, net 553 0.4 1,039 0.6
Income before income taxes 12,862 7.5 15,797 9.9
Provision for income taxes 4,947 2.9 5,967 3.8
Net income $ 7,915 4.6 $ 9,830 6.1
Earnings per share
Basic $ 0.45 - $ 0.56 -
Diluted $ 0.44 - $ 0.54 -
Average shares outstanding
Basic 17,695 - 17,689 -
Diluted 18,064 - 18,119 -
DORMAN PRODUCTS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
(in thousands)
06/28/08 12/29/07
Assets:
Cash and cash equivalents $ 7,492 $ 6,918
Accounts receivable 82,079 76,897
Inventories 87,888 80,565
Deferred income taxes 10,306 10,111
Prepaid expenses 3,103 1,921
Total current assets 190,868 176,412
Property & equipment 25,295 25,680
Goodwill 26,645 26,662
Other assets 1,629 1,901
Total assets $244,437 $230,655
Liability & Shareholders' Equity:
Current portion of long-term debt $ 8,656 $ 8,654
Accounts payable 20,902 18,752
Accrued expenses and other 7,788 10,718
Total current liabilities 37,346 38,124
Long-term debt and other 16,260 10,811
Deferred income taxes 8,392 7,862
Shareholders' equity 182,439 173,858
Total Liabilities and Equity $244,437 $230,655
Selected Cash Flow Information:
(in thousands) 13 Weeks (unaudited) 26 Weeks (unaudited)
-------------------- --------------------
06/28/08 06/30/07 06/28/08 06/30/07
Depreciation and
amortization $ 1,885 $1,885 $ 3,814 $3,748
Capital Expenditures $ 2,068 $1,410 $ 3,603 $2,652
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 June 30, 2007, and $0.8 million of which was
recorded in the six months ended June 30, 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)
---------------------------------------------
06/28/08 06/30/07 %Change
Net income, as reported $ 5,233 $5,768 -9.3%
Less:Vacation adjustment
net of tax - (238) N/A
_____________________________________________
Net income, as adjusted $ 5,233 $5,530 -5.4%
_____________________________________________
Diluted EPS, as reported $ 0.29 $0.32 -9.4%
Less:Vacation adjustment
net of tax - (0.01) N/A
_____________________________________________
Diluted EPS, as adjusted $ 0.29 $0.31 -6.5%
_____________________________________________
26 Weeks (unaudited)
---------------------------------------------
06/28/08 06/30/07 %Change
Net income, as reported $ 7,915 $ 9,830 -19.5%
Less:Vacation adjustment
net of tax - (487) N/A
_____________________________________________
Net income, as adjusted $ 7,915 $ 9,343 -15.3%
_____________________________________________
Diluted EPS, as reported $ 0.44 $0.54 -18.5%
Less:Vacation adjustment
net of tax - (0.02) N/A
_____________________________________________
Diluted EPS, as adjusted $ 0.44 $0.52 -15.4%
_____________________________________________