Highlights (All comparisons are to the prior year period unless otherwise noted):
- Net sales of $494.3 million for the quarter, down 1% reflecting the impact of an extra week in the prior year period, up 3% excluding this impact
- Record diluted earnings per share ("EPS") of $1.60 for the quarter, up 182% compared to $0.57
- Record adjusted diluted EPS* of $1.57 for the quarter, up 55% compared to $1.01
- Generated $60 million of cash from operating activities; repaid $30 million of debt and repurchased $15 million of its shares during the quarter
- For full year 2023, achieved diluted EPS of $4.10, adjusted diluted EPS* of $4.54 and record net sales of $1.93 billion
COLMAR, Pa., Feb. 26, 2024 (GLOBE NEWSWIRE) -- Dorman Products, Inc. (the "Company" or "Dorman") (NASDAQ:DORM), a leading supplier in the motor vehicle aftermarket industry, today announced its financial results for the fourth quarter and full year ended December 31, 2023.
Kevin Olsen, Dorman's President and Chief Executive Officer, stated, "We delivered record profits and robust cash flow in the fourth quarter. These results were driven by the continued improvement of our gross margin, which increased 780 basis points year-over-year. As a result, we achieved fourth quarter adjusted diluted EPS* of $1.57, which increased 55% over last year. Net sales declined 1% in the quarter due to a comparison to the prior year period that included an extra week. We estimate the extra week in the fourth quarter of 2022 contributed $19 million in net sales for that period. Excluding this impact, net sales for the fourth quarter of 2023 would have increased 3%.
"In addition, we had another quarter of healthy cash flow, with cash from operations of $60 million. Over the last few quarters, we focused on reducing our debt, repaying $30 million in the quarter and $159 million in the year. During the fourth quarter, we also acquired $15 million of our stock under our share repurchase program at an average price of $76.
"These results were only made possible by the effort of our incredible group of Contributors who continue to work tirelessly to drive innovation for both our customers and installers."
Fourth Quarter Financial Results
The Company reported fourth quarter 2023 net sales of $494.3 million, down 1% compared to net sales of $501.3 million in the fourth quarter of 2022.
Gross profit was $194.2 million in the fourth quarter of 2023, or 39.3% of net sales, compared to $157.8 million, or 31.5% of net sales, for the same quarter last year. Adjusted gross margin* was 39.3% in the fourth quarter of 2023 compared to 32.8% in the same quarter last year.
Selling, general and administrative ("SG&A") expenses were $117.0 million, or 23.7% of net sales, in the fourth quarter of 2023 compared to $125.0 million, or 24.9% of net sales, for the same quarter last year. Adjusted SG&A expenses* were $118.1 million, or 23.9% of net sales, in the fourth quarter of 2023, compared to $113.4 million, or 22.6% of net sales, in the same quarter last year.
Diluted EPS was $1.60 in the fourth quarter of 2023, up 182% compared to diluted EPS of $0.57 in the same quarter last year. Adjusted diluted EPS* was $1.57 in the fourth quarter of 2023, up 55% compared to adjusted diluted EPS* of $1.01 in the same quarter last year. The fourth quarter of 2022 included an extra week, which we estimate benefitted diluted EPS and adjusted diluted EPS* by $0.08.
Segment results were as follows:
Net Sales | Segment Profit Margin | |||||||||||||||
($ in millions) | Q4 2023 | Q4 2022 | Change | Q4 2023 | Q4 2022 | Change | ||||||||||
Light Duty | $ | 385.9 | $ | 386.2 | -0 | % | 16.6 | % | 9.4 | % | 720 bps | |||||
Heavy Duty | $ | 57.4 | $ | 65.4 | -12 | % | 6.8 | % | 9.6 | % | -280 bps | |||||
Specialty Vehicle | $ | 51.0 | $ | 49.6 | 3 | % | 15.7 | % | 17.2 | % | -150 bps | |||||
Full Year Financial Results
The Company reported full year 2023 net sales of $1,929.8 million, up 11% compared to net sales of $1,733.7 million in the prior year.
Gross profit was $685.4 million in 2023, or 35.5% of net sales, compared to $564.5 million, or 32.6% of net sales, in the prior year. Adjusted gross margin* was 36.1% in 2023 compared to 33.2% in the prior year.
SG&A expenses were $470.7 million, or 24.4% of net sales, in 2023 compared to $393.4 million, or 22.7% of net sales, for the prior year. Adjusted SG&A expenses* were $464.0 million, or 24.0% of net sales, in 2023, compared to $367.7 million, or 21.2% of net sales, in the prior year.
Diluted EPS was $4.10 in 2023, up 6% compared to diluted EPS of $3.85 in the prior year. Adjusted diluted EPS* was $4.54 in 2023, down 5% compared to adjusted diluted EPS of $4.76 in the prior year. The prior year included an extra week, which we estimate benefitted diluted EPS and adjusted diluted EPS* by $0.08.
Segment results were as follows:
Net Sales | Segment Profit Margin | |||||||||||||||
($ in millions) | FY 2023 | FY 2022 | Change | FY 2023 | FY 2022 | Change | ||||||||||
Light Duty | $ | 1,462.5 | $ | 1,425.9 | 3 | % | 12.8 | % | 11.9 | % | 90 bps | |||||
Heavy Duty | $ | 256.9 | $ | 258.2 | -1 | % | 5.6 | % | 11.5 | % | -590 bps | |||||
Specialty Vehicle1 | $ | 210.4 | $ | 49.6 | 324 | % | 15.0 | % | 17.2 | % | -220 bps | |||||
1 FY 2022 results reflect partial period from date of acquisition on October 4, 2022. | ||||||||||||||||
2024 Guidance
The Company expects 2024 full year net sales growth in the range of 3% to 5% over 2023, diluted EPS in the range of $4.71 to $5.01, and adjusted diluted EPS* in the range of $5.40 to $5.70. This guidance assumes a tax rate of 24%, includes the impact of recent cost reduction actions and excludes any potential impacts from future acquisitions and divestitures, supply chain disruptions, significant inflation and interest rate changes, and share repurchases.
Conference Call and Webcast
The Company will hold a conference call for investors on Tuesday, February 27, 2024 beginning at 8:00 a.m. Eastern time. The conference call may be accessed by dialing (888) 440-4182 within the U.S. or +1 (646) 960-0653 outside the U.S. When prompted, enter the conference ID number 1698878. A live audio webcast along with the accompanying presentation materials can be accessed on the Company's website at investors.dormanproducts.com under the subheading "News and Events." A replay of the webcast will be available on the Investor section of the Company's website after the call.
About Dorman Products
Dorman gives professionals, enthusiasts and owners greater freedom to fix motor vehicles. For over 100 years, we have been driving new solutions, releasing tens of thousands of aftermarket replacement products engineered to save time and money and increase convenience and reliability.
Founded and headquartered in the United States, we are a pioneering global organization offering an always-evolving catalog of products, covering cars, trucks and specialty vehicles, from chassis to body, from underhood to undercarriage, and from hardware to complex electronics.
*Non-GAAP Measures
In addition to the financial measures prepared in accordance with generally accepted accounting principles (GAAP), this earnings release also contains Non-GAAP financial measures. The reasons why we believe these measures provide useful information to investors and a reconciliation of these measures to the most directly comparable GAAP measures and other information relating to these Non-GAAP measures are included in the supplemental schedules attached.
Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Readers are cautioned not to place undue reliance on those forward-looking statements, which speak only as of the date such statements were made. Such forward-looking statements are based on current expectations that involve a number of known and unknown risks, uncertainties and other factors (many of which are outside of our control). Such risks, uncertainties and other factors relate to, among other things: competition in and the evolution of the motor vehicle aftermarket industry; changes in our relationships with, or the loss of, any customers or suppliers; our ability to develop, market and sell new and existing products; our ability to anticipate and meet customer demand; our ability to purchase necessary materials from our suppliers and the impacts of any related logistics constraints; widespread public health pandemics; political and regulatory matters, such as changes in trade policy, the imposition of tariffs and climate regulation; our ability to protect our information security systems and defend against cyberattacks; our ability to protect our intellectual property and defend against any claims of infringement; and financial and economic factors, such as our level of indebtedness, fluctuations in interest rates and inflation. More information on these risks and other potential factors that could affect the Company's business, reputation, results of operations, financial condition, and stock price is included in the Company's filings with the Securities and Exchange Commission ("SEC"), including in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of the Company's most recently filed periodic reports on Form 10-K and Form 10-Q and subsequent filings. The Company is under no obligation to, and expressly disclaims any such obligation to, update any of the information in this document, including but not limited to any situation where any forward-looking statement later turns out to be inaccurate whether as a result of new information, future events or otherwise.
Investor Relations Contact
David Hession, SVP and Chief Financial Officer
dhession@dormanproducts.com
(215) 997-1800
Visit our website at dormanproducts.com. The Investor Relations section of the website contains a significant amount of information about Dorman, including financial and other information for investors. Dorman encourages investors to visit its website periodically to view new and updated information.
DORMAN PRODUCTS, INC. AND SUBSIDIARIES | |||||||||||||
Consolidated Statements of Operations | |||||||||||||
(in thousands, except per-share amounts) | |||||||||||||
Three Months Ended | Three Months Ended | ||||||||||||
(unaudited) | 12/31/23 | Pct.* | 12/31/22 | Pct. * | |||||||||
Net sales | $ | 494,296 | 100.0 | $ | 501,281 | 100.0 | |||||||
Cost of goods sold | 300,074 | 60.7 | 343,507 | 68.5 | |||||||||
Gross profit | 194,222 | 39.3 | 157,774 | 31.5 | |||||||||
Selling, general and administrative expenses | 116,982 | 23.7 | 125,002 | 24.9 | |||||||||
Income from operations | 77,240 | 15.6 | 32,772 | 6.5 | |||||||||
Interest expense, net | 11,328 | 2.3 | 10,442 | 2.1 | |||||||||
Other income, net | (446 | ) | (0.1 | ) | (605 | ) | (0.1 | ) | |||||
Income before income taxes | 66,358 | 13.4 | 22,935 | 4.6 | |||||||||
Provision for income taxes | 16,074 | 3.3 | 5,099 | 1.0 | |||||||||
Net income | $ | 50,284 | 10.2 | $ | 17,836 | 3.6 | |||||||
Diluted earnings per share | $ | 1.60 | $ | 0.57 | |||||||||
Weighted average diluted shares outstanding | 31,511 | 31,494 |
Twelve Months Ended | Twelve Months Ended | ||||||||||||
(unaudited) | 12/31/23 | Pct.* | 12/31/22 | Pct. * | |||||||||
Net sales | $ | 1,929,788 | 100.0 | $ | 1,733,749 | 100.0 | |||||||
Cost of goods sold | 1,244,365 | 64.5 | 1,169,299 | 67.4 | |||||||||
Gross profit | 685,423 | 35.5 | 564,450 | 32.6 | |||||||||
Selling, general and administrative expenses | 470,663 | 24.4 | 393,402 | 22.7 | |||||||||
Income from operations | 214,760 | 11.1 | 171,048 | 9.9 | |||||||||
Interest expense, net | 48,061 | 2.5 | 15,582 | 0.9 | |||||||||
Other income, net | (1,804 | ) | (0.1 | ) | (735 | ) | (0.0 | ) | |||||
Income before income taxes |