Dorman Products Inc.: Dorman Products, Inc. Reports Sales and Earnings For the Second Quarter Ended June 27, 2015

Tickers: DORM
NEWS RELEASE NEWS RELEASE

Contact: Matthew Kohnke, CFO, mkohnke@dormanproducts.com, (215) 997-1800. Visit our website at www.dormanproducts.com

Dorman Products, Inc. Reports Sales and Earnings

For the Second Quarter Ended June 27, 2015

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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.

COLMAR, PENNSYLVANIA (July 29, 2015) - Dorman Products, Inc. (NASDAQ:DORM) today announced sales for the second quarter ended June 27, 2015 of $198.7 million, an increase of 1% from $196.2 million in the second quarter of 2014. Diluted earnings per share for the second quarter ended June 27, 2015 increased 2% to $0.65 per share from $0.64 per share in 2014.

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.

DORMAN PRODUCTS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations
(in thousands, except per-share data)

Second Quarter (unaudited)

13 Weeks

6/27/15 Pct.

13 Weeks

6/28/14

Pct.

Net sales

$198,721

100.0

$196,187 1

00.0

Cost of goods sold

122,151

61.5

123,226

62.8

Gross profit

Selling, general and administrative expenses

76,570

39,675

38.5

19.9

72,961

36,261

37.2

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

Selling, general and administrative expenses

149,463

78,916

38.6

20.4

144,603

70,956

38.1

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)

Assets:

6/27/15

12/27/14

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

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This content was issued by Dorman Products Inc. on the 2015-07-29 and was initially posted on www.dormanproducts.com. It was distributed, unedited and unaltered, by noodls on 2015-07-29 13:36:21 UTC. The original issuer is solely responsible for the accuracy of the information contained therein.