Dorman Products Reports Strong Increase in Second Quarter Results

Dorman Products, Inc. has announced that second quarter 2010 results rose by 20%, with net income up 83%, over 2009 results.
As noted, revenues for the three months ended June 26, 2010 increased 20% over the prior year to $115.0 million from $96.2 million last year. Net income in the second quarter of 2010 was up 83% to $11.5 million from $6.3 million in the same period last year. Diluted earnings per share rose 80% in the second quarter of 2010 to $0.63 from $0.35 last year.
All figures in U.S. dollars.
Year to date results show that for the twenty-six weeks ended June 26, 2010 and June 27, 2009:
— Revenues in 2010 increased 17.1% over the prior year to $214.0 million from $182.7 million last year. Revenue growth in both periods was driven by strong overall demand for our products and higher new product sales.
— Net income in 2010 was up 95% to $21.1 million from $10.8 million last year. Diluted earnings per share in 2010 rose 95% to $1.17 from $0.60 in 2009.
— Gross profit margin was 37.9% in 2010 compared to 33.1% in 2009. The increase in margin is the result of a reduction in freight expenses and certain material costs, along with lower product return costs.
— Selling, general and administrative expenses increased 8.4% in 2010 to $46.3 million from $42.7 million in 2009, but were down as a percentage of sales from 23.4% in 2009 to 21.6% in 2010. The spending increase was the result of higher variable costs related to our sales increase, increased new product development spending and higher incentive compensation expense due to higher earnings levels. These increases were partially offset by lower operating expenses in most areas due to cost reduction initiatives.
— Dorman’s effective tax rate increased to 39.1% from 38.5% in the prior year. The increase is a result of proportionately higher losses in foreign jurisdictions for which no tax benefit was recorded.
— Operating cash flow for 2010 was $16.7 million compared to $7.1 million in 2009.
Richard Berman, chairman and chief executive officer, said, “We reported a 20% increase in sales in the second quarter, and sales growth of 17% for the year. Continued growth in our ‘New to the Aftermarket’ product lines along with strong market demand for most other product lines are the primary reasons for these sales increases. Our organization remains focused on continuing to strengthen the fundamentals of our business, all of which are centered on new product development and satisfying the needs of our customers and end users. We are committed to growing all existing Dorman product lines and enhancing this growth with further investments in new product development.”

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