COLMAR, PA -- (MARKET WIRE) -- 08/01/08 -- Dorman Products, Inc. (NASDAQ: DORM) todayannounced 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 June28, 2008 were up 6% to $170.4 million from $160.1 million last year. Thefavorable effect of foreign currency exchange and the acquisition of theConsumer Division of Rockford Products Corporation accounted forapproximately 3% of the net sales increase in both periods. The remainingincrease is primarily the result of increased revenues from new productsales.
Reported net income in the second quarter of 2008 was $5.2 million comparedto net income of $5.8 million in the same period last year. Reporteddiluted earnings per share in the second quarter of 2008 were $0.29compared to $0.32 in the same period last year. Prior year results includea $0.01 per share benefit from a reduction in vacation expense as a resultof a change in our vacation policy. Excluding the impact of thisadjustment, net income in the second quarter of 2008 was $5.2 millioncompared to net income of $5.5 million in the same period last year anddiluted EPS in the second quarter of 2008 decreased to $0.29 from $0.31 inthe same period last year.
For the thirteen weeks ended June 28, 2008 and June 30, 2007:
-- 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.-- 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.-- Interest expense, net, decreased to $0.3 million from $0.5 million due to lower interest rates.-- 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 millioncompared 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, 2008were $0.44 compared to $0.54 in the same period last year. Excluding thevacation adjustment discussed below, net income in the first six months of2008 was $7.9 million compared to net income of $9.3 million in the sameperiod last year and diluted EPS for the first six months of 2008 decreasedto $0.44 from $0.52 in the same period last year.
Mr. Richard Berman, Chairman and Chief Executive Officer, said, "Salesgrowth in the quarter was 5% due to challenging aftermarket conditions. Wealso saw further increases in costs from rising commodity prices and theweak dollar that have not been offset by selling price increases. Thesefactors combined to result in a decline in second quarter earnings. Ourbalance sheet is strong and we remain confident in the long-term success ofour business despite these short term setbacks. We remain committed tomaintaining our leadership position in aftermarket with innovative newproducts 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, andhousehold hardware to the Automotive Aftermarket and Mass Merchandisemarkets. Dorman products are marketed under the OE Solutions(TM),HELP!®, AutoGrade(TM), Second Stop(TM), Conduct-Tite®, Symmetry® andScan-Tech® brand names.
Forward-looking statements in this release are made pursuant to the safeharbor provisions of the Private Securities Litigation Reform Act of 1995.Such forward-looking statements are subject to certain risks anduncertainties that could cause actual results to differ materially fromthose projected. Readers are cautioned not to place undue reliance onthese forward-looking statements which speak only as of the date hereof.Factors that could cause actual results to differ materially include, butare not limited to, those factors discussed in the Company's 2007 AnnualReport 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 $ 85,796 100.0Cost of goods sold 60,146 66.6 56,726 66.1Gross profit 30,165 33.4 29,070 33.9Selling, general and administrative expenses 21,469 23.8 19,225 22.4Income from operations 8,696 9.6 9,845 11.5Interest expense, net 285 0.3 512 0.6Income before income taxes 8,411 9.3 9,333 10.9Provision for income taxes 3,178 3.5 3,565 4.2Net income $ 5,233 5.8 $ 5,768 6.7Earnings 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 $160,089 100.0Cost of goods sold 115,568 67.8 105,243 65.7Gross profit 54,868 32.2 54,846 34.3Selling, general and administrative expenses 41,453 24.3 38,010 23.8Income from operations 13,415 7.9 16,836 10.5Interest expense, net 553 0.4 1,039 0.6Income before income taxes 12,862 7.5 15,797 9.9Provision for income taxes 4,947 2.9 5,967 3.8Net income $ 7,915 4.6 $ 9,830 6.1Earnings 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 12/29/07Assets:Cash and cash equivalents $ 7,492 $ 6,918Accounts receivable 82,079 76,897Inventories 87,888 80,565Deferred income taxes 10,306 10,111Prepaid expenses 3,103 1,921Total current assets 190,868 176,412Property & equipment 25,295 25,680Goodwill 26,645 26,662Other assets 1,629 1,901Total assets $ 244,437 $ 230,655Liability & Shareholders' Equity:Current portion of long-term debt $ 8,656 $ 8,654Accounts payable 20,902 18,752Accrued expenses and other 7,788 10,718Total current liabilities 37,346 38,124Long-term debt and other 16,260 10,811Deferred income taxes 8,392 7,862Shareholders' equity 182,439 173,858Total Liabilities and Equity $ 244,437 $ 230,655Selected Cash Flow Information:(in thousands) 13 Weeks (unaudited) 26 Weeks (unaudited) -------------------- -------------------- 06/28/08 06/30/07 06/28/08 06/30/07Depreciation and amortization $ 1,885 $ 1,885 $ 3,814 $ 3,748Capital 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 anddiluted 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 million 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 theusefulness of the financial information by providing measures which theCompany's management uses internally to evaluate the Company's baselineperformance. A reconciliation of net income and diluted earnings pershare follows: 13 Weeks (unaudited) ---------- --------- --------- 06/28/08 06/30/07 % ChangeNet 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 % ChangeNet 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% ========== ========= =========
For Further Information Contact:
Mathias J. Barton
CFO
(215) 997-1800 x 5132
E-mail: Email Contact
Corporate Headquarters:
Dorman Products, Inc.
3400 East Walnut Street
Colmar, Pennsylvania 18915
Fax: (215) 997-8577
Visit our Home Page: www.dormanproducts.com