Dorman Products, Inc. Reports Third Quarter 2024 Results; Raises Full Year 2024 Earnings Guidance
Highlights (All comparisons are to the prior year period unless otherwise noted):
Net sales of $503.8 million, up 3.2% compared to $488.2 million
Diluted earnings per share ("EPS") of $1.80, up 41% compared to $1.28
Adjusted diluted EPS* of $1.96, up 40% compared to $1.40
Repurchased $27 million of its shares and announced a new share repurchase authorization for up to $500 million
Updates its full-year guidance for 2024
COLMAR, Pa., Oct. 31, 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 third quarter ended September 28, 2024.
Kevin Olsen, Dorman's President and Chief Executive Officer, stated, "We delivered strong performance in the third quarter with earnings growth exceeding our expectations. Light Duty drove mid-single digit net sales growth, as our innovation strategy continues to bolster Dorman's leading portfolio of aftermarket solutions. While net sales were down in our Heavy Duty segment and flat in our Specialty Vehicle segment, both delivered solid topline results when considering the headwinds that persisted in each sector throughout the quarter. Each of our businesses continues to execute exceptionally well against our operational excellence initiatives. These efforts are enabling streamlined workflows, quicker speeds to market, and increased profitability across the enterprise.
"With three quarters of strong financial results, coupled with our positive outlook and visibility through the balance of the year, we are updating our full-year net sales and EPS growth guidance. For 2024, we now anticipate net sales growth to be in the range of 3.5% to 4.5%. We are also increasing and narrowing our EPS guidance and now expect diluted EPS to be in the range of $6.15 to $6.25 and adjusted diluted EPS* to be in the range of $6.85 to $6.95.
"We are pleased with our results through the third quarter and look forward to delivering solid sales and earnings growth for the year. Our performance is a testament to the hard work and dedication of our Contributors, the strength of our customer relationships, and our unwavering commitment to driving innovation for our end users."
Third Quarter Financial ResultsThe Company reported third-quarter 2024 net sales of $503.8 million, up 3.2% compared to net sales of $488.2 million in the third quarter of 2023.
Gross profit was $203.8 million in the third quarter of 2024, or 40.5% of net sales, compared to $183.2 million, or 37.5% of net sales, for the same quarter last year.
Selling, general and administrative ("SG&A") expenses were $124.5 million, or 24.7% of net sales, in the third quarter of 2024 compared to $119.0 million, or 24.4% of net sales, for the same quarter last year. Adjusted SG&A expenses* were $117.9 million, or 23.4% of net sales, in the third quarter of 2024, compared to $114.1 million, or 23.4% of net sales, in the same quarter last year.
Diluted EPS was $1.80 in the third quarter of 2024, up 41% compared to diluted EPS of $1.28 in the same quarter last year. Adjusted diluted EPS* was $1.96 in the third quarter of 2024, up 40% compared to adjusted diluted EPS* of $1.40 in the same quarter last year.
During the quarter, the Company generated $44 million in cash from operating activities, invested $9 million in capital expenditures, repaid $11 million of debt and returned $27 million to shareholders through stock repurchases.
Segment results were as follows:
Net Sales
Segment Profit Margin
($ in millions)
Q3 2024
Q3 2023
Change
Q3 2024
Q3 2023
Change
Light Duty
$
393.6
$
374.7
5
%
19.0
%
16.1
%
290 bps
Heavy Duty
59.6
62.8
-5
%
4.5
%
3.0
%
150 bps
Specialty Vehicle
50.6
50.6
0
%
17.0
%
13.5
%
350 bps
2024 GuidanceThe Company updated its full-year 2024 guidance, detailed in the table below, which excludes any potential impacts from future acquisitions and divestitures, supply chain disruptions, significant inflation, interest rate changes and additional share repurchases.
Updated 2024 Guidance
Prior 2024 Guidance
Net Sales Growth vs. 2023
3.5%, 4.5%
3%, 5%
Diluted EPS
$6.15, $6.25
$5.32, $5.52
Growth vs. 2023
50%, 52%
30%, 35%
Adjusted Diluted EPS*
$6.85, $6.95
$6.00, $6.20
Growth vs. 2023
51%, 53%
32%, 37%
Tax Rate Estimate
24%
24%
Share Repurchase ProgramDorman repurchased 273,653 shares of its common stock for $26.7 million at an average share price of $97.70 during the quarter ended September 28, 2024. The Company had $134.6 million remaining under its prior share repurchase authorization.
In October, the Company's Board of Directors authorized a new share repurchase program, effective January 1, 2025, authorizing the Company to repurchase up to $500 million of its outstanding common stock by the end of 2027. Under this program, share repurchases may be made from time to time depending on market conditions, share price, share availability and other factors at the Company's discretion. The prior share repurchase plan and any amounts that remain available for purchases under that plan will expire on December 31, 2024.
Conference Call and WebcastThe Company will hold a conference call and webcast for investors on Friday, November 1, 2024 beginning at 8:00 a.m. Eastern time. The conference call can be accessed by telephone at (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 Dorman Products, Inc. - Events. A replay of the session will be available on the Investor section of the Company's website after the call.
About Dorman ProductsDorman 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 MeasuresIn 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 StatementsThis press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "may," "will," "should," "likely," "probably," "anticipates," "expects," "intends," "plans," "projects," "believes," "views," "estimates" and similar expressions are used to identify these forward-looking statements. 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 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 ContactAlex Whitelam, VP, Investor Relations & Risk (445) 448-9522
Visit our website at www.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. Consolidated Statements of Operations(in thousands, except per-share amounts)
Three Months Ended
Three Months Ended
(unaudited)
9/28/24
Pct.*
9/30/23
Pct. *
Net sales
$
503,773
100.0
$
488,186
100.0
Cost of goods sold
299,970
59.5
304,968
62.5
Gross profit
203,803
40.5
183,218
37.5
Selling, general and administrative expenses
124,532
24.7
119,010
24.4
Income from operations
79,271
15.7
64,208
13.2
Interest expense, net
9,762
1.9
12,215
2.5
Other income, net
1,615
0.3
605
0.1
Income before income taxes
71,124
14.1
52,598
10.8
Provision for income taxes
15,871
3.2
12,076
2.5
Net income
$
55,253
11.0
$
40,522
8.3
Diluted earnings per share
$
1.80
$
1.28
Weighted average diluted shares outstanding
30,739
31,555
Nine Months Ended
Nine Months Ended
(unaudited)
9/28/24
Pct.*
9/30/23
Pct. *
Net sales
$
1,475,425
100.0
$
1,435,492
100.0
Cost of goods sold
890,775
60.4
944,291
65.8
Gross profit
584,650
39.6
491,201
34.2
Selling, general and administrative expenses
378,489
25.7
353,681
24.6
Income from operations
206,161
14.0
137,520
9.6
Interest expense, net
30,569
2.1
36,733
2.6
Other income, net
1,711
0.1
1,358
0.1
Income before income taxes
177,303
12.0
102,145
7.1
Provision for income taxes
41,812
2.8
23,170
1.6
Net income
$
135,491
9.2
$
78,975
5.5
Diluted earnings per share
$
4.37
$
2.50
Weighted average diluted shares outstanding
31,019
31,540
* Percentage of sales. Data may not add due to rounding.
DORMAN PRODUCTS, INC. Consolidated Balance Sheets (in thousands, except share data)
(unaudited)
9/28/24
12/31/23
Assets
Current assets:
Cash and cash equivalents
$
45,127
$
36,814
Accounts receivable, less allowance for doubtful accounts of $1,647 and $3,518
571,051
526,867
