Dorman Reports Strong Gains

Aftermarket auto parts supplier Dorman Products, Inc. has announced year-over-year gains for both the fourth quarter and end of year results.

Revenues for the three months ended December 26, 2009 increased 20% over the prior year to $96.7 million from $80.7 million last year. For the year ended December 26, 2009, revenues were up 10% to $377.4 million from $342.3 million. Revenue growth in both periods was driven by strong overall demand for the company’s products and higher new product sales. All figures in U.S. dollars.

Reported net income in the fourth quarter of 2009 was up 57% to $7.7 million from $4.9 million in the same period last year. Reported diluted earnings per share in the fourth quarter of 2009 rose 59% to $0.43 from $0.27 in the same period last year. Excluding the impact of a one-time item, net income in the fourth quarter of 2009 was up 83% to $7.7 million from $4.2 million in the same period last year and diluted EPS in the fourth quarter of 2009 increased 87% to $0.43 from $0.23 in the same period in 2008.

Reported net income for the year ended December 26, 2009 was up 49% to $26.5 million from $17.8 million in the same period in 2008. Reported diluted earnings per share for the year ended December 26, 2009 were up 48% to $1.47 from $0.99 in 2008. Excluding the impact of a one-time item, net income in 2009 was up 55% to $26.5 million from $17.1 million in the same period in 2008 and diluted EPS in 2009 increased 55% to $1.47 from $0.95 in the same period in 2008.

Richard Berman, chairman and chief executive officer, said, “Revenue growth in 2009 was just over 10% and was driven primarily by continued strong acceptance and market penetration of our new product lines and line extensions. Our 2010 plan provides for further investment in our new product capabilities. We look forward to sharing the new products generated by these investments with our customers and end users as the year progresses.”

Highlights:

–Gross profit margin was 34.9% in 2009 compared to 32.2% in 2008. The increase in margin is the result of lower warranty and product return costs along with a reduction in freight expenses and certain material costs.

–Selling, general and administrative expenses increased 7.7% in 2009 to $88.1 million from $81.8 million in 2008, but was down as a percentage of sales from 23.9% in 2008 to 23.3% in 2009. The spending increase was the result of higher variable costs related to the sales increase as well as increased new product development spending and higher incentive compensation expense due to higher earnings levels.

–Interest expense, net, decreased to $0.3 million in 2009 from $0.9 million in 2008 due to lower borrowing levels and interest rates.

–Effective tax rate increased to 38.8% from 35.2% in the prior year. The increase is the result of a $0.7 million tax benefit realized in 2008 upon the disposition of our Canadian Subsidiary and higher provisions for state income taxes in 2009.

–Operating cash flow for 2009 increased $17.9 million to $27.6 million from $9.7 million in 2008.  The increased cash flow enabled the company to decrease total debt by $15.1 million during 2009. Total debt outstanding as of December 26, 2009 was only $0.4 million.