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Dorman Products Inc.$81.86($1.05)(1.27%)

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 Dorman Products, Inc. Reports Sales and Earnings for the Fourth Quarter and Full-Year Ended December 31, 2016
   Wednesday, February 22, 2017 7:00:38 AM ET

COLMAR, PA--(Marketwired - Feb 22, 2017) - Dorman Products, Inc. (DORM )

Q4 Sales increased 12% over prior year to $229 million

Q4 EPS increased 34% over prior year to $0.83 per diluted share

Q4 Operating Cash Flow increased 91% over prior year to $66 million

Full-Year 2016 Sales increased 7% to $860 million and EPS increased 18% to $3.07.

Dorman Products, Inc. (DORM ), a leading supplier in the automotive aftermarket, today announced record sales and EPS for the fourth quarter and full-year ended December 31, 2016. 

4th Quarter Financial Results Net Sales for the 14 week fourth quarter ended December 31, 2016 increased $24.3 million, or 12%, to $229.1 million from $204.8 million for the 13 week fourth quarter ended 2015. Net Sales growth, adjusted for the additional week, was approximately 7%. Gross Profit for the fourth quarter increased 18% to $92.2 million (or 40.2% of sales) from $77.8 million (or 38.0% of sales) in the fourth quarter of 2015. Selling, General and Administrative ("SG&A") Expenses for the fourth quarter increased 4% to $45.1 million (or 19.7% of sales) from $43.4 million (or 21.2% of sales) in the fourth quarter of 2015. Operating Cash Flow increased 91% to $66.0 million compared to $34.6 million in the same quarter last year. Diluted Earnings Per Share for the fourth quarter increased 34% to $0.83 per share from $0.62 per share in the fourth quarter of 2015. EPS growth, adjusted for the additional week, was approximately 24%.

As expected, the unfavorable stocking order comparisons we experienced in the third quarter reversed, and sales growth returned to much stronger levels in the fourth quarter aided by an extra shipping week in 2016. Gross Margin expansion was primarily driven by a more favorable sales mix, a result of exiting some underperforming, low margin product lines last year in the fourth quarter, lower excess and obsolete provisions as we continue to reduce inventory levels while improving the quality of inventory on hand and, to a lesser extent, leverage on the higher sales volumes. SG&A Expenses, adjusted for a $3 million pre-tax bad debt provision taken in the fourth quarter of 2015, grew 12%. The extra week, continued investment in new product development, and volume growth were the primary drivers of the SG&A Expense growth. 

Under its share repurchase program, Dorman repurchased 101.2 thousand shares of its common stock during the fourth quarter ended December 31, 2016 at an average share price of $63.04.

Full Year 2016 Financial Results Net Sales for the 53 week fiscal year ended December 31, 2016 increased $56.6 million, or 7%, to $859.6 million from $803.0 million for the 52 week fiscal year ended December 25, 2016. Gross Profit for fiscal 2016 increased 10% to $338.1 million (or 39.3% of sales) from $308.1 million (or 38.4% of sales) in fiscal 2015. SG&A Expenses for fiscal 2016 increased 5% to $169.5 million (or 19.7% of sales) from $161.9 million (or 20.2% of sales) in fiscal 2015. Operating Cash Flow increased 32% to $121.5 million for fiscal 2016 compared to $92.1 million in fiscal 2015. Diluted Earnings Per Share for fiscal 2016 increased 18% to $3.07 per share from $2.60 per share in fiscal 2015.

Under its share repurchase program, Dorman repurchased 430.9 thousand shares of its common stock during fiscal 2016 at an average share price of $52.15.

"We are pleased to announce another successful year highlighted by record sales and earnings. Our success is directly attributable to the tireless efforts of our contributors who continue to execute our proven "New to the Aftermarket" product development strategy while ensuring high levels of service to our customers and end users. I would like to thank all our contributors who continue to drive Dorman to new levels of performance. Our core mission continues to be identifying failure prone passenger car, light truck, and heavy duty truck parts that are only available from dealerships and make a high quality alternative available to our customers and end users. To that end, we continue to invest in our new product capabilities allowing us to deliver growth well in excess of industry growth levels. During 2016, we introduced 4,220 new parts, including 1,255 "Formerly Dealer Only" parts. Sales from New Product launched in the last twenty four months as a percentage of total sales was 17% and we remain confident that we can continue to deliver above average industry growth over the long term by remaining laser-focused on this "New to the Aftermarket" mission. As a result, our previously issued guidance for 2017 remains unchanged as we continue to expect mid to high single digit organic revenue and net income growth," said Matt Barton, President and Chief Executive Officer. 

Dorman Products, Inc. is a leading supplier of Dealer "Exclusive" replacement parts to the Automotive, Medium and Heavy Duty Aftermarkets. 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 26, 2015. 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
Consolidated Statements of Operations
(in thousands, except per-share amounts)
                                                                       
                                        14 Weeks                        13 Weeks
Fourth Quarter (unaudited)                     12/31/16   Pct.       12/26/15   Pct.
Net sales                                    $      229,097    100.0    $      204,834    100.0
Cost of goods sold                             136,926    59.8       127,041    62.0
Gross profit                                   92,171     40.2       77,793     38.0
Selling, general and administrative expenses   45,123     19.7       43,423     21.2
Income from operations                         47,048     20.5       34,370     16.8
Interest expense, net                          61         -          64         0.1
Income before income taxes                     46,987     20.5       34,306     16.7
Provision for income taxes                     18,286     8.0        12,519     6.1
Net income                                   $      28,701     12.5     $      21,787     10.6
                                                             
Diluted earnings per share                   $      0.83           $      0.62        
                                                             
Weighted average diluted shares outstanding    34,517           35,323      
                                                             
                                                             
                                                             
DORMAN PRODUCTS, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(in thousands, except per-share amounts)
                                                                     
                                        53 Weeks                       52 Weeks
Year Ended (unaudited)                       12/31/16         Pct.     12/26/15         Pct.
Net sales                                    $      859,604   100.0    $      802,957   100.0
Cost of goods sold                             521,530   60.7       494,907   61.6
Gross profit                                   338,074   39.3       308,050   38.4
Selling, general and administrative expenses   169,473   19.7       161,893   20.2
Income from operations                         168,601   19.6       146,157   18.2
Interest expense, net                          241       -          216       -
Income before income taxes                     168,360   19.6       145,941   18.2
Provision for income taxes                     62,311    7.3        53,612    6.7
Net income                                   $      106,049   12.3     $      92,329    11.5
                                                           
Diluted earnings per share                   $      3.07          $      2.60       
                                                           
Weighted average diluted shares outstanding    34,598          35,538     
                                                           
                                                           
                                                           
DORMAN PRODUCTS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
(in thousands)
                                                  
                                     12/31/16         12/26/15
Assets:                                             
Cash and cash equivalents                 $      149,121   $      78,659
Accounts receivable                         230,526     203,923
Inventories                                 168,851     193,725
Prepaid expenses                            3,116       2,326
Total current assets                        551,614     478,633
Property, plant & equipment, net            88,436      87,046
Goodwill and other intangible assets, net   29,788      29,889
Deferred income taxes, net                  12,429      7,557
Other assets                                29,525      18,740
Total assets                              $      711,792   $      621,865
                                               
Liabilities & shareholders’ equity:                 
Accounts payable                          $      72,629    $      63,967
Accrued expenses and other                  31,219      34,603
Total current liabilities                   103,848     98,570
Other long-term liabilities                 6,302       5,259
Shareholders’ equity                        601,642     518,036
Total liabilities and equity              $      711,792   $      621,865
                                               
                                               
                                               
Selected Cash Flow Information (unaudited):                                 
         (in thousands) 14 Weeks                13 Weeks        53 Weeks        52 Weeks
                        12/31/16                12/26/15        12/31/16        12/26/15
Depreciation, amortization                                
and accretion                $          5,017        $      4,447    $      18,907   $      16,186
Capital expenditures         $          5,169        $      5,154    $      20,059   $      21,688
                                                     

Visit our website at www.dormanproducts.com



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