COLMAR, PA--(Marketwired - Jul 29, 2015) - Dorman Products, Inc. (
Second Quarter Highlights:
- Sales increased 1% to $198.7 million.
- EPS increased 2% to $0.65 per diluted share.
- Cash flow from operations increased to $11.1 million.
- Number of new products introduced ramps up.
Dorman Products, Inc. (
Gross profit margin was 38.5% for the second quarter ended June 27, 2015 compared to 37.2% for the same period last year. The gross profit margin improvement was primarily due to a favorable sales mix shift and lower transportation costs. Selling, general and administrative expenses increased 9%, or $3.4 million, during the quarter as a result of $1.9 million in additional costs associated with our ERP conversion. These incremental costs decreased from $2.8 million in the first quarter of 2015. The ERP-related expenses in the second quarter include $1.0 million in increased distribution costs (down from $1.7 million in the first quarter), ongoing incremental spending of $0.4 million in support costs and $0.5 million in additional depreciation expense. Distribution costs are expected to return to historical levels by the end of the third quarter.
"The second quarter of 2015 sales growth rate was impacted by the 21% growth experienced in the second quarter of 2014 and the ongoing inventory reduction program by one customer. Softer market conditions also led to a reduction in product sell-through when compared to the first quarter and the prior year, but remain at encouraging levels," said Mr. Steven Berman, Chairman and Chief Executive Officer. "Growth rates in the second half of the year are expected to improve as the difficult comps of the prior year are behind us."
For the six months ended June 27, 2015, sales increased 2% over the comparable prior year period to $387.2 million from $379.7 million last year. Diluted earnings per share in 2015 declined 2% to $1.25 from $1.28 in the same period last year. Operating cash flow increased to $34.9 million for the first six months of 2015 compared to $19.2 million in the first six months of 2014.
"During the first half of 2015, sales from products introduced in the last 24 months represented 20% of our sales, which is down from 22% in fiscal 2014. The reduction is due to one large customer that has delayed expansion of new product placements that we believe will eventually normalize, and a slower new product introduction rate over the last 9 months," continued Mr. Berman. "We increased the number of new products released in the second quarter to 1,012 from 701 in the first quarter as we move beyond the distraction caused by the ERP implementation. Including the 690 new parts introduced in July, we are now ahead of last year's new product introduction pace and believe we will exceed prior year introductions by approximately 10%. The number of new parts introduced is a metric which helps us drive future longer term sales growth and does not have significant impact on sales in the quarter when these parts are introduced."
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®, TECHoice™, Dorman® Hybrid Drive Batteries and Dorman HD Solutions™ brand names.
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including statements related to the Company's future growth rates. 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 27, 2014. 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.
Visit our website at www.dormanproducts.com
| DORMAN PRODUCTS, INC. AND SUBSIDIARIES | ||||||||||
| Condensed Consolidated Statements of Operations | ||||||||||
| (in thousands, except per-share data) | ||||||||||
| 13 Weeks | 13 Weeks | |||||||||
| Second Quarter (unaudited) | 6/27/15 | Pct. | 6/28/14 | Pct. | ||||||
| Net sales | $ | 198,721 | 100.0 | $ | 196,187 | 100.0 | ||||
| Cost of goods sold | 122,151 | 61.5 | 123,226 | 62.8 | ||||||
| Gross profit | 76,570 | 38.5 | 72,961 | 37.2 | ||||||
| Selling, general and administrative expenses | 39,675 | 19.9 | 36,261 | 18.5 | ||||||
| Income from operations | 36,895 | 18.6 | 36,700 | 18.7 | ||||||
| Interest expense, net | 52 | 0.1 | 63 | - | ||||||
| Income before income taxes | 36,843 | 18.5 | 36,637 | 18.7 | ||||||
| Provision for income taxes | 13,700 | 6.9 | 13,393 | 6.9 | ||||||
| Net income | $ | 23,143 | 11.6 | $ | 23,244 | 11.8 | ||||
| Diluted earnings per share | $ | 0.65 | $ | 0.64 | ||||||
| Weighted average diluted shares outstanding | 35,614 | 36,471 | ||||||||
| DORMAN PRODUCTS, INC. AND SUBSIDIARIES | ||||||||||
| Condensed Consolidated Statements of Operations | ||||||||||
| (in thousands, except per-share data) | ||||||||||
| 26 Weeks | 26 Weeks | |||||||||
| Second Quarter (unaudited) | 6/27/15 | Pct. | 6/28/14 | Pct. | ||||||
| Net sales | $ | 387,195 | 100.0 | $ | 379,699 | 100.0 | ||||
| Cost of goods sold | 237,732 | 61.4 | 235,096 | 61.9 | ||||||
| Gross profit | 149,463 | 38.6 | 144,603 | 38.1 | ||||||
| Selling, general and administrative expenses | 78,916 | 20.4 | 70,956 | 18.7 | ||||||
| Income from operations | 70,547 | 18.2 | 73,647 | 19.4 | ||||||
| Interest expense, net | 104 | - | 102 | - | ||||||
| Income before income taxes | 70,443 | 18.2 | 73,545 | 19.4 | ||||||
| Provision for income taxes | 25,961 | 6.7 | 26,750 | 7.1 | ||||||
| Net income | $ | 44,482 | 11.5 | $ | 46,795 | 12.3 | ||||
| Diluted earnings per share | $ | 1.25 | - | $ | 1.28 | - | ||||
| Weighted average diluted shares outstanding | 35,629 | - | 36,514 | - | ||||||
| DORMAN PRODUCTS, INC. AND SUBSIDIARIES | ||||||
| Condensed Consolidated Balance Sheets | ||||||
| (Unaudited) | ||||||
| (in thousands) | ||||||
| 6/27/15 | 12/27/14 | |||||
| Assets: | ||||||
| Cash and cash equivalents | $ | 67,199 | $ | 47,656 | ||
| Accounts receivable | 197,292 | 206,035 | ||||
| Inventories | 198,782 | 173,523 | ||||
| Deferred income taxes | 25,701 | 25,103 | ||||
| Prepaid expenses | 3,827 | 3,147 | ||||
| Total current assets | 492,801 | 455,464 | ||||
| Property & equipment | 85,202 | 82,270 | ||||
| Goodwill and other intangible assets | 29,939 | 29,989 | ||||
| Other assets | 17,351 | 12,645 | ||||
| Total assets | $ | 625,293 | $ | 580,368 | ||
| Liabilities & Shareholders' Equity: | ||||||
| Accounts payable | $ | 67,411 | $ | 59,541 | ||
| Accrued expenses and other | 26,642 | 31,292 | ||||
| Total current liabilities | 94,053 | 90,833 | ||||
| Other long-term liabilities | 4,632 | 4,822 | ||||
| Deferred income taxes | 21,835 | 22,652 | ||||
| Shareholders' equity | 504,773 | 462,061 | ||||
| Total Liabilities and Equity | $ | 625,293 | $ | 580,368 | ||
| Selected Cash Flow Information: | ||||||||||||
| (in thousands) | 13 Weeks (unaudited) | 26 Weeks (unaudited) | ||||||||||
| 6/27/15 | 6/28/14 | 6/27/15 | 6/28/14 | |||||||||
| Depreciation, amortization and accretion | $ | 3,978 | $ | 2,976 | $ | 7,596 | $ | 5,836 | ||||
| Capital expenditures | $ | 5,267 | $ | 8,870 | $ | 11,016 | $ | 15,878 | ||||