Dorman Products, Inc. [DORM] Filings

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

10-Q 1 dorm-10q_20220625.htm 10-Q dorm-10q_20220625.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 25, 2022

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 0-18914

Dorman Products, Inc.

(Exact name of registrant as specified in its charter)

Pennsylvania		23-2078856
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

3400 East Walnut Street, Colmar, Pennsylvania		18915
(Address of principal executive offices)		(Zip Code)

(215) 997-1800

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common stock, par value $0.01 per share		DORM		NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

As of July 21, 2022 the registrant had 31,431,905 shares of common stock, par value $0.01 per share, outstanding.

DORMAN PRODUCTS, INC. AND SUBSIDIARIES

INDEX TO QUARTERLY REPORT ON FORM 10-Q

June 25, 2022

		Page
PART I — FINANCIAL INFORMATION

ITEM 1.	Financial Statements (unaudited)

	Condensed Consolidated Statements of Operations and Comprehensive Income	3

	Condensed Consolidated Balance Sheets	4

	Condensed Consolidated Statements of Shareholders’ Equity	5

	Condensed Consolidated Statements of Cash Flows	6

	Notes to Condensed Consolidated Financial Statements	7

ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14

ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	21

ITEM 4.	Controls and Procedures	21

PART II — OTHER INFORMATION

ITEM 1.	Legal Proceedings	23

ITEM 1A.	Risk Factors	23

ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	23

ITEM 3.	Defaults Upon Senior Securities	23

ITEM 4.	Mine Safety Disclosures	24

ITEM 5.	Other Information	24

ITEM 6.	Exhibits	24

Exhibit Index		25

Signatures		26

PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements

DORMAN PRODUCTS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME

(UNAUDITED)

	Three Months Ended						Six Months Ended
(in thousands, except per share data)	June 25, 2022			June 26, 2021			June 25, 2022			June 26, 2021
Net sales	$	417,419		$	310,635		$	818,998		$	598,647
Cost of goods sold		275,894			200,510			544,233			384,002
Gross profit		141,525			110,125			274,765			214,645
Selling, general and administrative expenses		92,058			69,517			178,586			132,386
Income from operations		49,467			40,608			96,179			82,259
Interest expense, net		1,565			63			2,796			184
Other income, net		(111	)		(153	)		(195	)		(238	)
Income before income taxes		48,013			40,698			93,578			82,313
Provision for income taxes		10,108			9,080			20,466			17,965
Net income	$	37,905		$	31,618		$	73,112		$	64,348
Other comprehensive income:
Change in foreign currency translation adjustment	$	(1,999	)	$	—		$	(303	)	$	—
Comprehensive Income	$	35,906		$	31,618		$	72,809		$	64,348

Earnings per share:
Basic	$	1.21		$	0.99		$	2.32		$	2.01
Diluted	$	1.20		$	0.99		$	2.32		$	2.00
Weighted average shares outstanding:
Basic		31,424			31,942			31,461			31,995
Diluted		31,535			32,089			31,568			32,136

See accompanying Notes to Condensed Consolidated Financial Statements

DORMAN PRODUCTS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(in thousands, except for share data)	June 25, 2022			December 25, 2021
Assets
Current assets:
Cash and cash equivalents	$	51,966		$	58,782
Accounts receivable, less allowance for doubtful accounts of $1,373 and $1,326		417,354			472,764
Inventories		634,774			531,988
Prepaids and other current assets		26,965			13,048
Total current assets		1,131,059			1,076,582
Property, plant and equipment, net		117,930			114,864
Operating lease right-of-use assets		96,580			59,029
Goodwill		197,165			197,332
Intangible assets, net		172,658			178,809
Other assets		45,775			46,503
Total assets	$	1,761,167		$	1,673,119
Liabilities and shareholders’ equity
Current liabilities:
Accounts payable	$	203,456		$	177,389
Accrued compensation		14,391			26,636
Accrued customer rebates and returns		185,163			188,080
Revolving credit facility		229,360			239,360
Other accrued liabilities		27,965			33,583
Total current liabilities		660,335			665,048
Long-term operating lease liabilities		87,459			52,443
Other long-term liabilities		5,117			4,916
Deferred tax liabilities, net		17,299			17,976
Commitments and contingencies (Note 8)
Shareholders’ equity:
Common stock, $0.01 par value; 50,000,000 shares authorized; 31,425,224 and 31,607,509 shares issued and outstanding in 2022 and 2021, respectively		314			316
Additional paid-in capital		82,192			77,451
Retained earnings		910,194			856,409
Accumulated other comprehensive loss		(1,743	)		(1,440	)
Total shareholders’ equity		990,957			932,736
Total liabilities and shareholders' equity	$	1,761,167		$	1,673,119

See accompanying Notes to Condensed Consolidated Financial Statements

DORMAN PRODUCTS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(UNAUDITED)

	Three Months Ended June 25, 2022
	Common Stock
(in thousands, except share data)	Shares Issued			Par Value			Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total
Balance at March 26, 2022		31,479,916		$	315		$	78,906		$	879,923		$	256		$	959,400
Exercise of stock options		14,808			—			957			—			—			957
Compensation expense under Incentive Stock Plan		—			—			2,118			—			—			2,118
Purchase and cancellation of common stock		(75,321	)		(1	)		(136	)		(7,141	)		—			(7,278	)
Issuance of non-vested stock, net of cancellations		6,732			—			—			—			—			—
Other stock-related activity, net of tax		(911	)		—			347			(493	)		—			(146	)
Other comprehensive income		—			—			—			—			(1,999	)		(1,999	)
Net income		—			—			—			37,905			—			37,905
Balance at June 25, 2022		31,425,224		$	314		$	82,192		$	910,194		$	(1,743	)	$	990,957

	Three Months Ended June 26, 2021
	Common Stock
(in thousands, except share data)	Shares Issued			Par Value			Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total
Balance at March 27, 2021		32,115,528		$	321		$	67,596		$	815,894		$	—		$	883,811
Exercise of stock options		5,732			—			420			—			—			420
Compensation expense under Incentive Stock Plan		—			—			2,380			—			—			2,380
Purchase and cancellation of common stock		(266,871	)		(2	)		(480	)		(26,793	)		—			(27,275	)
Issuance of non-vested stock, net of cancellations		38,120			—			2,493			—			—			2,493
Other stock-related activity, net of tax		(619	)		—			(462	)		—			—			(462	)
Net income		—			—			—			31,618			—			31,618
Balance at June 26, 2021		31,891,890		$	319		$	71,947		$	820,719		$	—		$	892,985

	Six Months Ended June 25, 2022
	Common Stock
(in thousands, except share data)	Shares Issued			Par Value			Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total
Balance at December 25, 2021		31,607,509		$	316		$	77,451		$	856,409		$	(1,440	)	$	932,736
Exercise of stock options		17,286			—			957			—			—			957
Compensation expense under Incentive Stock Plan		—			—			4,270			—			—			4,270
Purchase and cancellation of common stock		(186,435	)		(2	)		(336	)		(17,857	)		—			(18,195	)
Issuance of non-vested stock, net of cancellations		4,221			—			377			—			—			377
Other stock-related activity, net of tax		(17,357	)		—			(527	)		(1,470	)		—			(1,997	)
Other comprehensive income		—			—			—			—			(303	)		(303	)
Net income		—			—			—			73,112			—			73,112
Balance at June 25, 2022		31,425,224		$	314		$	82,192		$	910,194		$	(1,743	)	$	990,957

	Six Months Ended June 26, 2021
	Common Stock
(in thousands, except share data)	Shares Issued			Par Value			Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total
Balance at December 26, 2020		32,168,740		$	322		$	64,085		$	789,152		$	—		$	853,559
Exercise of stock options		17,346			—			736			—			—			736
Compensation expense under Incentive Stock Plan		—			—			4,491			—			—			4,491
Purchase and cancellation of common stock		(305,031	)		(3	)		(549	)		(30,697	)		—			(31,249	)
Issuance of non-vested stock, net of cancellations		20,521			—			2,493			—			—			2,493
Other stock-related activity, net of tax		(9,686	)		—			691			(2,084	)		—			(1,393	)
Net income		—			—			—			64,348			—			64,348
Balance at June 26, 2021		31,891,890		$	319		$	71,947		$	820,719		$	—		$	892,985

See accompanying Notes to Condensed Consolidated Financial Statements

DORMAN PRODUCTS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Six Months Ended
(in thousands)	June 25, 2022			June 26, 2021
Cash Flows from Operating Activities:
Net income	$	73,112		$	64,348
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation, amortization and accretion		19,600			16,850
Provision for doubtful accounts		56			31
Benefit for deferred income taxes		(551	)		(213	)
Provision for stock-based compensation		4,270			4,491
Changes in assets and liabilities:
Accounts receivable		55,341			14,605
Inventories		(102,824	)		(58,039	)
Prepaids and other current assets		(7,347	)		(8,288	)
Other assets		(726	)		(3,451	)
Accounts payable		25,565			8,818
Accrued customer rebates and returns		(2,917	)		9,826
Accrued compensation and other liabilities		(26,193	)		(9,891	)
Cash provided by operating activities		37,386			39,087
Cash Flows from Investing Activities:
Proceeds from purchase price adjustment		595			—
Property, plant and equipment additions		(16,100	)		(10,153	)
Cash used in investing activities		(15,505	)		(10,153	)
Cash Flows from Financing Activities:
Payments of revolving credit line		(10,000	)		—
Proceeds from exercise of stock options		894			736

Dorman Products, Inc. [DORM] Filings
10-Q	[2022-07-25]
10-Q	[2022-04-25]
10-K	[2022-02-22]
10-Q	[2021-10-25]
10-Q	[2021-07-26]
10-Q	[2021-04-26]
10-K	[2021-02-22]
10-Q	[2020-10-29]
10-Q	[2020-07-30]
10-Q	[2020-04-27]
10-K	[2020-02-26]
10-Q	[2019-10-28]
10-Q	[2019-07-31]
10-Q	[2019-05-01]
10-K	[2019-02-26]
10-Q	[2018-10-30]
10-Q	[2018-08-01]
10-Q	[2018-05-03]
10-K	[2018-02-27]
10-Q	[2017-11-01]
10-Q	[2017-08-03]
10-Q	[2017-05-04]
10-K	[2017-02-27]
10-Q	[2016-10-26]
10-Q	[2016-07-28]
10-Q	[2016-04-28]
10-K	[2016-02-23]
10-Q	[2015-10-29]
10-Q	[2015-07-30]
10-Q	[2015-05-01]
10-K	[2015-02-25]
10-Q	[2014-10-31]
10-Q	[2014-08-01]
10-Q	[2014-05-02]
10-K	[2014-02-25]
10-Q	[2013-11-01]
10-Q	[2013-08-02]
10-Q	[2013-05-03]
10-K	[2013-03-01]
10-Q	[2012-11-02]
10-Q	[2012-08-03]
10-Q	[2012-05-04]
10-K	[2012-03-02]