Form 8-K Dorman Products, Inc. For: Apr 28

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): April 28, 2015

 

 

Dorman Products, Inc.

(Exact name of Registrant as Specified in Charter)

 

 

 

Pennsylvania		000-18914		23-2078856
(State or Other Jurisdiction of Incorporation)		(Commission File Number)		(IRS Employer Identification No.)

3400 East Walnut Street, Colmar, Pennsylvania 18915

(Address of Principal Executive Offices)

Registrant’s telephone number, including area code: (215) 997-1800

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

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Item 2.02.

Results of Operation and Financial Condition.

The information being furnished in this Item 2.02 and in Exhibit 99.1 shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act except as shall be expressly set forth by specific reference in such filing.

On April 28, 2015, Dorman Products, Inc. (the “Company”) issued a press release announcing its operating results for the first quarter ended March 28, 2015. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated by reference herein.

Certain statements in this document constitute “forward-looking statements” within the meaning of the Federal Private Securities Litigation Reform Act of 1995. While forward-looking statements sometimes are presented with numerical specificity, they are based on various assumptions made by management regarding future circumstances over many of which the Company has little or no control. Forward-looking statements may be identified by words including “anticipate,” “believe,” “estimate,” “expect,” and similar expressions. The Company cautions readers that forward-looking statements, including, without limitation, those relating to future business prospects, revenues, working capital, liquidity, and income, are subject to certain risks and uncertainties that would cause actual results to differ materially from those indicated in the forward-looking statements. Factors that could cause actual results to differ from forward-looking statements include but are not limited to: (i) competition in the automotive aftermarket; (ii) unfavorable economic conditions; (iii) the loss or decrease in sales among one of our top customers; (iv) customer consolidation in the automotive aftermarket leading to less favorable customer contract terms; (v) the cancellation or rescheduling of orders; (vi) foreign currency fluctuations and our dependence on foreign suppliers; (vii) extended credit to customers who may be unable to pay; (viii) the loss of a key vendor; (ix) limited customer shelf space; (x) reliance on new product development; (xi) patent filings made by original equipment manufacturers continuing to increase; (xii) quality problems with product after their production and sale to customers; (xiii) loss of third party transportation providers on whom we depend; (xiv) improperly executed, or unrealized cost savings from, our on-going information technology initiatives; (xv) unfavorable results of legal proceedings; (xvi) dependence on senior management and control by officers, directors, and family members; (xvii) operations may be subject to quarter fluctuations and disruptions from events beyond our control. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. For additional information concerning factors that could cause actual results to differ materially from the information contained in this report, reference is made to the information in Part I, “Item 1A Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 27, 2014. You should not place undue reliance on forward-looking statements. Such statements speak only as to the date on which they are made, and we undertake no obligation to update publicly or revise any forward-looking statement, regardless of future developments or availability of new information.

 

Item 9.01

Financial Statements and Exhibits.

 

Exhibit Number		Description
99.1		Press Release dated April 28, 2015

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

				DORMAN PRODUCTS, INC.
Date: April 28, 2015				By:		/s/ Matthew Kohnke
				Name:		Matthew Kohnke
				Title:		Chief Financial Officer

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Exhibit Index

 

Exhibit Number		Description
99.1		Press Release dated April 28, 2015

Exhibit 99.1

NEWS RELEASE

 

Contact:  Matthew Kohnke, CFO, [email protected], (215) 997-1800.    Visit our website at www.dormanproducts.com

Dorman Products, Inc. Reports Sales and Earnings

For the First Quarter Ended March 28, 2015

First Quarter Results:

 

•

Q1 sales increased 3% after 19% growth in Q1 2014

 

•

Q1 EPS decreased 6% to $0.60 per diluted share

 

•

Cash flow from operations increased to $23.8 million

 

•

ERP transition shows steady progress

COLMAR, PENNSYLVANIA (April 28, 2015) – Dorman Products, Inc. (NASDAQ: DORM) today announced sales for the first quarter ended March 28, 2015 of $188.5 million, an increase of 3% from $183.5 million in the first quarter of 2014. Diluted earnings per share for the first quarter ended March 28, 2015 decreased 6% to $0.60 per share from $0.64 per share in 2014.

Gross profit margin was 38.7% for the first quarter ended March 28, 2015 compared to 39.0% for the same period last year. Selling, general and administrative expenses increased 13%, or $4.5 million, during the quarter as a result of additional costs associated with our ERP conversion totaling $2.8 million, inflationary cost increases and increased investments in product development initiatives. ERP-related conversion expenses consisted of $1.7 million in increased distribution costs, $0.6 million in support costs, and $0.5 million in additional depreciation expense.

“Sales growth for the quarter was a modest 3% primarily as a result of exceptionally strong growth in the first quarter of 2014 and the continued negative impact of an inventory reduction program at one large customer. Despite these challenges, we achieved a two-year stacked sales growth rate of 22%,” said Mr. Steven Berman, Chairman and Chief Executive Officer. “Sell-through rates of our products in the quarter, despite several weeks in February that were negatively impacted by extreme weather, remain encouraging. We would like to thank our customers and end-users for their continued support.”

“We continue to work towards completion of the stabilization and transition phase of our ERP conversion. The incremental costs associated with the post go-live ERP transition declined significantly in the quarter, but were higher than expected. To ensure our customer demands were met during this period, we intentionally increased our distribution costs. The increased distribution costs are expected to decline over the next three to six months before stabilizing. We expect to offset the remaining incremental costs gradually through improved efficiencies beginning later this year.” said Mr. Berman. “The distraction associated with the ERP implementation did slow down the introduction rate of our new products, but we expect to return to our previous pace in the next few months. We remain confident in our ability to return to low double digit sales and earnings growth later this year.”

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During the first quarter of 2015, we repurchased 13,700 shares of our common stock for $0.6 million at an average price of $45.41 per share. Since the inception of the program, we have repurchased 869,300 shares of our common stock for $41.0 million. We have approximately $59.0 million remaining under our current $100 million share repurchase program.

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™, 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. 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.

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DORMAN PRODUCTS, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

(in thousands, except per-share amounts)

 

		13 Weeks								13 Weeks
First Quarter (unaudited)		3/28/15				Pct.				3/29/14				Pct.
Net sales		$	188,474				100.0			$	183,512				100.0
Cost of goods sold			115,581				61.3				111,870				61.0
Gross profit			72,893				38.7				71,642				39.0
Selling, general and administrative expenses			39,241				20.8				34,695				18.9
Income from operations			33,652				17.9				36,947				20.1
Interest expense, net			52				0.1				39				—
Income before income taxes			33,600				17.8				36,908				20.1
Provision for income taxes			12,261				6.5				13,357				7.3
Net income		$	21,339				11.3			$	23,551				12.8
Diluted earnings per share		$	0.60							$	0.64
Weighted average diluted shares outstanding			35,643								36,549

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DORMAN PRODUCTS, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Unaudited)

(in thousands)

 

		3/28/15				12/27/14
Assets:
Cash and cash equivalents		$	64,599			$	47,656
Accounts receivable			201,142				206,035
Inventories			183,038				173,523
Deferred income taxes			25,402				25,103
Prepaids and other current assets			2,514				3,147
Total current assets			476,695				455,464
Property, plant & equipment, net			84,460				82,270
Goodwill and other intangible assets, net			29,964				29,989
Other assets			14,067				12,645
Total assets		$	605,186			$	580,368
Liabilities & shareholders’ equity:
Accounts payable		$	60,480			$	59,541
Accrued expenses and other			35,594				31,292
Total current liabilities			96,074				90,833
Other long-term liabilities			4,462				4,822
Deferred income taxes			22,024				22,652
Shareholders’ equity			482,626				462,061
Total liabilities and equity		$	605,186			$	580,368

Selected Cash Flow Information (unaudited):

 

(in thousands)		13 Weeks				13 Weeks
		3/28/15				3/29/14
Depreciation, amortization and accretion		$	3,618			$	2,860
Capital expenditures		$	5,749			$	7,008

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