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Dorman (DORM) Q2 EPS Jumps 23%
The Motley Fool· 2025-08-04 21:17
Core Insights - Dorman Products reported strong Q2 2025 results, exceeding consensus expectations for both GAAP revenue and non-GAAP adjusted earnings per share, driven by growth in the Light Duty segment and effective supply chain initiatives [1][5][11] - The company raised its full-year 2025 guidance, reflecting confidence in continued operational improvements and market demand [1][11] Financial Performance - Q2 2025 GAAP revenue reached $541.0 million, surpassing the analyst estimate of $517.0 million, marking a 7.6% increase from $503.0 million in Q2 2024 [1][2] - Adjusted diluted EPS for Q2 2025 was $2.06, exceeding the non-GAAP estimate of $1.80 and showing a year-over-year increase of 23.4% from $1.67 [1][2] - Gross profit margin improved to 40.6%, up from 39.6% in Q2 2024, while adjusted SG&A expenses as a percentage of revenue slightly increased to 24.3% [2][6] Segment Performance - The Light Duty segment experienced a 10% year-over-year sales growth, with segment profit margins widening to 18.5% [5] - The Heavy Duty segment saw modest revenue growth of 1%, but profitability declined, with segment profit margin dropping by 360 basis points [5] - The Specialty Vehicle segment's sales contracted by 3%, yet maintained strong margins at 17.3% [5] Business Strategy - Dorman Products focuses on expanding its product line and distribution reach, with approximately 138,000 unique parts available as of December 31, 2024 [3][4] - The company launched 5,335 new SKUs in 2024, including first-to-market solutions, contributing to sales growth in the Light Duty segment [7][8] - Dorman has diversified its global supply chain, reducing dependence on China to 30-40% of sourcing in 2025, down from approximately 70% six years ago [9] Management Outlook - The company raised its FY2025 net sales growth guidance to 7-9%, up from 3-5%, and adjusted diluted EPS guidance to $8.60-$8.90, up from $7.55-$7.85 [11] - Management expects to maintain an effective tax rate of 24% for FY2025 [11] - Investors should monitor inventory management, product innovation pace, and relationships with major customers, which account for approximately 39% of total net sales [10][12]
Dorman(DORM) - 2025 Q2 - Quarterly Results
2025-08-04 20:02
[Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) [Second Quarter 2025 Performance Overview](index=1&type=section&id=Second%20Quarter%202025%20Performance%20Overview) Dorman Products reported an outstanding second quarter 2025, with net sales growing 7.6% to $541.0 million, driven by strong demand in its Light Duty business. Diluted EPS increased by 25% to $1.91, and adjusted diluted EPS rose by 23% to $2.06, benefiting from cost savings initiatives across supply chain diversification, productivity, and automation - Strong demand in **Light Duty business** drove top-line growth[3](index=3&type=chunk) - Cost savings from **supply chain diversification, productivity, and automation initiatives** contributed to bottom-line growth[3](index=3&type=chunk) | Metric | Q2 2025 | Q2 2024 | Change | | :----- | :------ | :------ | :----- | | Net Sales | $541.0 million | $503.0 million | +7.6% | | Diluted EPS | $1.91 | $1.53 | +25% | | Adjusted Diluted EPS | $2.06 | $1.67 | +23% | [Full Year 2025 Guidance Update (Initial Mention)](index=1&type=section&id=Full%20Year%202025%20Guidance%20Update%20(Initial%20Mention)) Following strong first-half performance and an improved outlook, Dorman Products raised its full-year 2025 guidance for net sales growth to 7-9% and diluted EPS to $8.05-$8.35, with adjusted diluted EPS expected to be $8.60-$8.90 - Full year 2025 guidance for **net sales and diluted EPS** has been raised due to strong first-half performance and improved outlook[4](index=4&type=chunk) | Metric | New 2025 Guidance Range | | :----- | :---------------------- | | Net Sales Growth | 7% to 9% | | Diluted EPS | $8.05 to $8.35 | | Adjusted Diluted EPS | $8.60 to $8.90 | [Second Quarter 2025 Financial Results](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Results) [Consolidated Financial Performance](index=1&type=section&id=Consolidated%20Financial%20Performance) For Q2 2025, Dorman Products reported net sales of $541.0 million, a 7.6% increase year-over-year. Gross profit improved to $219.5 million, representing 40.6% of net sales, up from 39.6% in Q2 2024. SG&A expenses were $137.0 million (25.3% of net sales), while diluted EPS reached $1.91 and net income was $58.7 million | Metric (in thousands) | Q2 2025 | Q2 2024 | YoY Change | Q2 2025 % of Net Sales | Q2 2024 % of Net Sales | | :-------------------------------- | :------ | :------ | :--------- | :--------------------- | :--------------------- | | Net sales | $540,959 | $502,951 | +7.6% | 100.0% | 100.0% | | Cost of goods sold | $321,446 | $303,550 | +5.9% | 59.4% | 60.4% | | Gross profit | $219,513 | $199,401 | +10.1% | 40.6% | 39.6% | | Selling, general, and administrative expenses | $137,032 | $126,949 | +7.9% | 25.3% | 25.2% | | Income from operations | $82,481 | $72,452 | +13.8% | 15.2% | 14.4% | | Net income | $58,709 | $47,410 | +23.8% | 10.9% | 9.4% | | Diluted earnings per share | $1.91 | $1.53 | +24.8% | N/A | N/A | [Segment Performance](index=2&type=section&id=Segment%20Performance) In Q2 2025, the Light Duty segment saw a 10% increase in net sales to $424.4 million, with its profit margin improving by 140 basis points to 18.5%. Heavy Duty sales grew 1% to $62.1 million, though its profit margin decreased by 360 basis points to 0.8%. Specialty Vehicle sales declined 3% to $54.5 million, with a slight profit margin decrease of 50 basis points to 17.3% | Segment | Q2 2025 Net Sales (millions) | Q2 2024 Net Sales (millions) | Sales Change | Q2 2025 Profit Margin | Q2 2024 Profit Margin | Margin Change | | :------------ | :--------------------------- | :--------------------------- | :----------- | :-------------------- | :-------------------- | :------------ | | Light Duty | $424.4 | $385.4 | +10% | 18.5% | 17.1% | +140 bps | | Heavy Duty | $62.1 | $61.2 | +1% | 0.8% | 4.4% | -360 bps | | Specialty Vehicle | $54.5 | $56.4 | -3% | 17.3% | 17.8% | -50 bps | [Full Year 2025 Guidance](index=2&type=section&id=Full%20Year%202025%20Guidance) [Updated 2025 Guidance (GAAP & Adjusted)](index=2&type=section&id=Updated%202025%20Guidance%20(GAAP%20%26%20Adjusted)) Dorman Products updated its full-year 2025 guidance, now projecting net sales growth of 7-9% (up from 3-5%), diluted EPS of $8.05-$8.35 (up from $7.00-$7.30), and adjusted diluted EPS of $8.60-$8.90 (up from $7.55-$7.85). This reflects expected impacts of tariffs enacted as of August 4, 2025, and excludes other potential disruptions - Updated guidance includes expected impact of **tariffs enacted as of August 4, 2025**, but excludes potential impacts from future tariff changes, supply chain disruptions, and other factors[10](index=10&type=chunk) | Metric | Updated 2025 Guidance | Prior 2025 Guidance | Updated Growth vs. 2024 | Prior Growth vs. 2024 | | :-------------------- | :-------------------- | :------------------ | :---------------------- | :-------------------- | | Net Sales Growth vs. 2024 | 7% – 9% | 3% – 5% | N/A | N/A | | Diluted EPS | $8.05 – $8.35 | $7.00 – $7.30 | 31% – 36% | 14% – 19% | | Adjusted Diluted EPS* | $8.60 – $8.90 | $7.55 – $7.85 | 21% – 25% | 6% – 10% | | Tax Rate Estimate | 24% | 24% | N/A | N/A | [Company Information & Disclosures](index=2&type=section&id=Company%20Information%20%26%20Disclosures) [About Dorman Products](index=2&type=section&id=About%20Dorman%20Products) Dorman Products is a leading US-based global supplier in the motor vehicle aftermarket industry, providing tens of thousands of replacement products for cars, trucks, and specialty vehicles, engineered to save time and money while increasing convenience and reliability - Dorman Products is a **leading supplier** in the motor vehicle aftermarket industry[2](index=2&type=chunk) - The company offers an always-evolving catalog of replacement products for **cars, trucks, and specialty vehicles**, covering various components from chassis to electronics[13](index=13&type=chunk)[14](index=14&type=chunk) - Products are engineered to **save time and money** and increase convenience and reliability[13](index=13&type=chunk) [Conference Call and Investor Relations](index=2&type=section&id=Conference%20Call%20and%20Investor%20Relations) Dorman Products will host a conference call and webcast on August 5, 2025, at 8:00 a.m. Eastern time to discuss results. Investors can access a live audio webcast and presentation materials on the company's website, where a replay will also be available. Investor inquiries can be directed to Alex Whitelam, VP, Investor Relations - Conference call and webcast scheduled for **August 5, 2025, at 8:00 a.m. Eastern time**[12](index=12&type=chunk) - Access details: telephone **(888) 440-4182 (U.S.)** or **+1 (646) 960-0653 (outside U.S.)**, Conference ID **1698878**. Live audio webcast and presentation materials available on Dorman Products, Inc. - Events[12](index=12&type=chunk) - Investor Relations Contact: **Alex Whitelam, VP, Investor Relations**, awhitelam@dormanproducts.com, **(445) 448-9522**[18](index=18&type=chunk) [Non-GAAP Measures Disclosure](index=2&type=section&id=Non-GAAP%20Measures%20Disclosure) Dorman Products uses non-GAAP financial measures to provide additional insights into its operating performance, financial position, and cash flows, believing they offer useful information to investors by highlighting underlying growth and profitability trends. These measures are not substitutes for GAAP and may not be comparable to those of other companies - Non-GAAP financial measures are presented to provide useful information to investors by offering additional ways of viewing **results, profitability trends, and underlying growth**[15](index=15&type=chunk)[25](index=25&type=chunk) - Management uses these non-GAAP measures for **financial, operating, and planning decisions and performance evaluation**[25](index=25&type=chunk) - Non-GAAP measures should not be used as a substitute for GAAP measures or considered in isolation, and may not be comparable to similarly titled measures reported by other companies[25](index=25&type=chunk) [Forward-Looking Statements](index=2&type=section&id=Forward-Looking%20Statements) This press release contains forward-looking statements subject to various known and unknown risks, uncertainties, and other factors, many outside the company's control. Readers are cautioned not to place undue reliance on these statements, which speak only as of their original date. The company disclaims any obligation to update this information - Press release contains 'forward-looking statements' identified by words such as **'expects,' 'intends,' 'plans,' 'believes,'** etc[16](index=16&type=chunk)[17](index=17&type=chunk) - Forward-looking statements are based on current expectations and involve known and unknown risks, uncertainties, and other factors, including **competition, customer/supplier relationships, product development, supply chain, regulatory matters (tariffs, climate), cybersecurity, intellectual property, and financial/economic factors**[17](index=17&type=chunk) - Readers are cautioned not to place undue reliance on these statements, and the company is under no obligation to update them[17](index=17&type=chunk) [Consolidated Financial Statements (GAAP)](index=4&type=section&id=Consolidated%20Financial%20Statements%20(GAAP)) [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) The Consolidated Statements of Operations detail Dorman Products' financial performance for the three and six months ended June 28, 2025, and June 29, 2024. For the six months ended June 28, 2025, net sales were $1,048.7 million, gross profit was $427.2 million (40.7% of sales), and net income was $116.2 million, resulting in diluted EPS of $3.78 | Metric (in thousands) | Three Months Ended 6/28/25 | Three Months Ended 6/29/24 | Six Months Ended 6/28/25 | Six Months Ended 6/29/24 | | :-------------------------------- | :------------------------- | :------------------------- | :----------------------- | :----------------------- | | Net sales | $540,959 | $502,951 | $1,048,651 | $971,652 | | Cost of goods sold | $321,446 | $303,550 | $621,430 | $590,805 | | Gross profit | $219,513 | $199,401 | $427,221 | $380,847 | | Selling, general, and administrative expenses | $137,032 | $126,949 | $264,666 | $253,957 | | Income from operations | $82,481 | $72,452 | $162,555 | $126,890 | | Interest expense, net | $7,182 | $10,202 | $14,540 | $20,807 | | Other income, net | $(1,544) | $(136) | $(2,905) | $(96) | | Income before income taxes | $76,843 | $62,386 | $150,920 | $106,179 | | Provision for income taxes | $18,134 | $14,976 | $34,706 | $25,941 | | Net income | $58,709 | $47,410 | $116,214 | $80,238 | | Diluted earnings per share | $1.91 | $1.53 | $3.78 | $2.58 | | Weighted average diluted shares outstanding | 30,680 | 31,071 | 30,744 | 31,160 | [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) The Consolidated Balance Sheets present Dorman Products' financial position. As of June 28, 2025, total assets were $2,471.5 million, with current assets at $1,426.7 million. Total liabilities stood at $1,071.7 million, and total shareholders' equity was $1,399.7 million | Metric (in thousands) | 6/28/25 | 12/31/24 | | :-------------------------------- | :------ | :------- | | **Assets:** | | | | Cash and cash equivalents | $56,845 | $57,137 | | Accounts receivable, net | $532,121 | $573,787 | | Inventories | $798,211 | $707,977 | | Total current assets | $1,426,731 | $1,369,760 | | Property, plant, and equipment, net | $166,606 | $164,499 | | Goodwill | $444,334 | $442,886 | | Total assets | $2,471,465 | $2,424,521 | | **Liabilities & Shareholders' Equity:** | | | | Accounts payable | $221,307 | $231,814 | | Total current liabilities | $520,074 | $563,802 | | Long-term debt | $430,338 | $439,513 | | Total liabilities | $1,071,719 | $1,127,251 | | Total shareholders' equity | $1,399,746 | $1,293,470 | | Total liabilities and shareholders' equity | $2,471,465 | $2,424,521 | [Selected Cash Flow Information](index=5&type=section&id=Selected%20Cash%20Flow%20Information) For the six months ended June 28, 2025, cash provided by operating activities was $59.8 million, a decrease from $115.3 million in the prior year period. Capital expenditures for the same period were $19.4 million, down from $22.7 million | Metric (in thousands) | Three Months Ended 6/28/25 | Three Months Ended 6/29/24 | Six Months Ended 6/28/25 | Six Months Ended 6/29/24 | | :-------------------------- | :------------------------- | :------------------------- | :----------------------- | :----------------------- | | Cash provided by operating activities | $8,548 | $63,349 | $59,785 | $115,329 | | Depreciation and amortization | $13,919 | $14,352 | $27,762 | $28,203 | | Capital expenditures | $8,450 | $11,935 | $19,435 | $22,690 | [Non-GAAP Financial Measures Reconciliation](index=6&type=section&id=Non-GAAP%20Financial%20Measures%20Reconciliation) [Adjusted Net Income and Diluted EPS Reconciliation](index=6&type=section&id=Adjusted%20Net%20Income%20and%20Diluted%20EPS%20Reconciliation) Dorman Products reconciles GAAP net income and diluted EPS to adjusted figures by excluding pretax acquisition-related intangible assets amortization, transaction and other costs, and reduction in workforce costs, along with their tax adjustments. For Q2 2025, adjusted net income was $63.1 million and adjusted diluted EPS was $2.06 | Metric (in thousands, except per share) | Three Months Ended 6/28/25 | Three Months Ended 6/29/24 | Six Months Ended 6/28/25 | Six Months Ended 6/29/24 | | :-------------------------------------- | :------------------------- | :------------------------- | :----------------------- | :----------------------- | | Net income (GAAP) | $58,709 | $47,410 | $116,214 | $80,238 | | Pretax acquisition-related intangible assets amortization | $5,406 | $5,481 | $10,877 | $10,965 | | Pretax acquisition-related transaction and other costs | $341 | $448 | $833 | $931 | | Pretax reduction in workforce costs | $33 | $282 | $147 | $4,850 | | Tax adjustment (related to above items) | $(1,403) | $(1,644) | $(2,877) | $(4,161) | | Adjusted net income (Non-GAAP) | $63,086 | $51,977 | $125,194 | $92,823 | | Diluted earnings per share (GAAP) | $1.91 | $1.53 | $3.78 | $2.58 | | Adjusted diluted earnings per share (Non-GAAP) | $2.06 | $1.67 | $4.07 | $2.98 | [Adjusted Gross Profit Reconciliation](index=7&type=section&id=Adjusted%20Gross%20Profit%20Reconciliation) The reconciliation of gross profit shows minimal adjustments. For Q2 2025 and the six months ended June 28, 2025, GAAP gross profit was equal to adjusted gross profit, as there were no significant pretax acquisition-related transaction and other costs impacting gross profit in these periods | Metric (in thousands) | Three Months Ended 6/28/25 | Three Months Ended 6/29/24 | Six Months Ended 6/28/25 | Six Months Ended 6/29/24 | | :-------------------------------------- | :------------------------- | :------------------------- | :----------------------- | :----------------------- | | Gross profit (GAAP) | $219,513 | $199,401 | $427,221 | $380,847 | | Pretax acquisition-related transaction and other costs | — | $2 | — | $10 | | Adjusted gross profit (Non-GAAP) | $219,513 | $199,403 | $427,221 | $380,857 | [Adjusted SG&A Expenses Reconciliation](index=7&type=section&id=Adjusted%20SG%26A%20Expenses%20Reconciliation) Dorman Products reconciles GAAP SG&A expenses to adjusted SG&A expenses by excluding acquisition-related intangible assets amortization, transaction and other costs, and reduction in workforce costs. For Q2 2025, adjusted SG&A expenses were $131.3 million, or 24.3% of net sales, compared to GAAP SG&A of $137.0 million (25.3% of net sales) | Metric (in thousands) | Three Months Ended 6/28/25 | Three Months Ended 6/29/24 | Six Months Ended 6/28/25 | Six Months Ended 6/29/24 | | :-------------------------------------- | :------------------------- | :------------------------- | :----------------------- | :----------------------- | | SG&A expenses (GAAP) | $137,032 | $126,949 | $264,666 | $253,957 | | Pretax acquisition-related intangible assets amortization | $(5,406) | $(5,481) | $(10,877) | $(10,965) | | Pretax acquisition-related transaction and other costs | $(341) | $(446) | $(833) | $(921) | | Pretax reduction in workforce costs | $(33) | $(282) | $(147) | $(4,850) | | Adjusted SG&A expenses (Non-GAAP) | $131,252 | $120,740 | $252,809 | $237,221 | | Adjusted SG&A expenses % of Net Sales | 24.3% | 24.0% | 24.1% | 24.4% | [Notes to Non-GAAP Adjustments](index=8&type=section&id=Notes%20to%20Non-GAAP%20Adjustments) The notes clarify the nature of non-GAAP adjustments: acquisition-related intangible asset amortization (allocating purchase price over benefit period), acquisition-related transaction and other costs (incurred for completing and integrating acquisitions), and reduction in workforce costs (severance and related expenses from planned workforce reductions). Tax adjustments reflect the aggregate tax effect of these items - Pretax acquisition-related intangible asset amortization results from allocating the purchase price of acquisitions to acquired assets and recognizing the cost over the period of benefit[31](index=31&type=chunk) - Pretax acquisition-related transaction and other costs include costs incurred to complete and integrate acquisitions[32](index=32&type=chunk) - Pretax reduction in workforce costs represent costs incurred in connection with planned workforce reduction, including severance and other payroll-related costs[34](index=34&type=chunk) [2025 Guidance Non-GAAP Reconciliation](index=9&type=section&id=2025%20Guidance%20Non-GAAP%20Reconciliation) Dorman Products provides a reconciliation for its full-year 2025 diluted EPS guidance, adjusting GAAP diluted EPS by adding back pretax acquisition-related intangible assets amortization and transaction costs, and then applying a tax adjustment, to arrive at the adjusted diluted EPS guidance range of $8.60-$8.90 | Metric | Low End* | High End* | | :-------------------------------------- | :------- | :-------- | | Diluted earnings per share (GAAP) | $8.05 | $8.35 | | Pretax acquisition-related intangible assets amortization | $0.69 | $0.69 | | Pretax acquisition transaction and other costs | $0.03 | $0.03 | | Tax adjustment (related to above items) | $(0.17) | $(0.17) | | Adjusted diluted earnings per share (Non-GAAP) | $8.60 | $8.90 | | Weighted average diluted shares outstanding | 30,800 | 30,800 |
Dorman Products, Inc. Reports Second Quarter 2025 Results and Raises Full Year 2025 Guidance
GlobeNewswire News Room· 2025-08-04 20:01
Core Viewpoint - Dorman Products, Inc. reported strong financial results for the second quarter of 2025, with significant growth in both net sales and earnings per share, driven by robust demand in the Light Duty segment and effective cost-saving initiatives [2][3][10]. Financial Performance - The company achieved net sales of $541.0 million in Q2 2025, representing a 7.6% increase from $503.0 million in Q2 2024 [3][10]. - Gross profit for the quarter was $219.5 million, or 40.6% of net sales, compared to $199.4 million, or 39.6% of net sales, in the same quarter last year [4]. - Selling, general, and administrative (SG&A) expenses were $137.0 million, or 25.3% of net sales, up from $126.9 million, or 25.2% of net sales, in Q2 2024 [5]. - Diluted earnings per share (EPS) increased by 25% to $1.91, compared to $1.53 in the same quarter last year, while adjusted diluted EPS rose by 23% to $2.06 from $1.67 [6][10]. Segment Performance - The Light Duty segment reported net sales of $424.4 million, a 10% increase from $385.4 million in Q2 2024, with a segment profit margin improvement of 140 basis points to 18.5% [6]. - The Heavy Duty segment saw net sales of $62.1 million, a 1% increase from $61.2 million, but with a decline in segment profit margin of 360 basis points to 0.8% [6]. - The Specialty Vehicle segment experienced a 3% decrease in net sales to $54.5 million from $56.4 million, with a slight decline in profit margin of 50 basis points to 17.3% [6]. Updated Guidance - The company raised its full-year 2025 guidance, now expecting net sales growth of 7% to 9% and diluted EPS in the range of $8.05 to $8.35, compared to previous guidance of 3% to 5% growth and diluted EPS of $7.00 to $7.30 [3][9][33]. - Adjusted diluted EPS guidance was also increased to a range of $8.60 to $8.90, up from $7.55 to $7.85 [11][33].
Dorman Products: Exercising Caution As Earnings Approach
Seeking Alpha· 2025-07-25 15:45
One enterprise that has recently underperformed my expectations has been Dorman Products (NASDAQ: DORM ). You see, whenever I rate a company a "Hold," I'm making the claim that shares should experience returns that would be similar to the broader market as measuredCrude Value Insights offers you an investing service and community focused on oil and natural gas. We focus on cash flow and the companies that generate it, leading to value and growth prospects with real potential.Subscribers get to use a 50+ sto ...
Dorman Products, Inc. Announces Date to Report Second Quarter 2025 Financial Results
GlobeNewswire News Room· 2025-07-14 13:15
Company Overview - Dorman Products, Inc. is a pioneering global organization that has been providing aftermarket replacement products for over 100 years, focusing on enhancing convenience and reliability for vehicle repairs [3][4]. Financial Results Announcement - The company will report its financial results for the second quarter ended June 28, 2025, after the closing of the Nasdaq Stock Market on August 4, 2025 [1]. - A conference call and webcast to discuss these financial results is scheduled for August 5, 2025, at 8 a.m. ET, accessible via a dedicated phone line and the company's website [2]. Product Offering - Dorman offers a comprehensive catalog of products that cover a wide range of vehicles, including cars, trucks, and specialty vehicles, addressing various components from chassis to complex electronics [4].
Strattec vs. Dorman Products: Which Stock is a Better Buy Right Now?
ZACKS· 2025-06-30 15:36
Core Insights - Strattec Security (STRT) and Dorman Products, Inc. (DORM) are key suppliers in the automotive ecosystem, with revenues tied to vehicle production and aftermarket demand [1] Group 1: Performance Comparison - Over the past year, STRT has risen 145.1%, outperforming DORM's 37.7% growth, but deeper analysis of business fundamentals is necessary for a solid investment case [2][7] - STRT is trading at a 5.15x trailing 12-month EV/EBITDA, which is at a discount compared to DORM's 10.43x [11] Group 2: Tariff and Supply Chain Exposure - More than 90% of STRT's U.S. sales qualify for tariff-free or reduced-tariff rules, providing a cost advantage and stability [5][6] - DORM sources approximately 30% to 40% of its products from China, exposing it to geopolitical and trade risks [8] Group 3: Financial Health - STRT has a strong balance sheet with a debt-to-capitalization ratio of 5.25%, significantly lower than the industry average of 27.8%, allowing for greater financial flexibility [9] - DORM's free cash flow is healthy but is largely used for debt repayment and returning capital to shareholders, which may limit near-term flexibility [10] Group 4: Investment Outlook - STRT is working on reducing its China exposure, making it a more attractive investment option compared to DORM [15]
Dorman announces planned retirement of Chief Financial Officer David M. Hession
Globenewswire· 2025-06-05 20:15
Company Announcement - Dorman Products, Inc. announced the retirement plans of David M. Hession, Senior Vice President and Chief Financial Officer, later this year [1] - The company has initiated a search process for Mr. Hession's successor with the help of an executive search firm [1] Leadership Insights - Kevin Olsen, President and CEO of Dorman, acknowledged Mr. Hession's integral role in driving the company's strong financial performance over the past six years [2] - Mr. Hession joined Dorman as CFO in February 2019 and contributed to business expansion through strategic acquisitions and strengthening the company's balance sheet and liquidity [2] Transition Plans - Mr. Hession will remain in his position until a successor is appointed and will serve in an advisory role to ensure a smooth transition [1][3] - He expressed pride in the accomplishments during his tenure and confidence in Dorman's future success [3] Company Background - Dorman has been providing aftermarket replacement products for over 100 years, focusing on solutions that save time and money for vehicle repair [4] - The company offers a diverse catalog of products for various vehicles, including cars, trucks, and specialty vehicles [5]
2 Auto Replacement Stocks Poised to Gain From the Repair Boom
ZACKS· 2025-06-03 14:16
Industry Outlook - The Zacks Automotive - Replacement Parts industry has a strong outlook due to the aging vehicle fleet in the U.S., which averages 12.6 years, leading to high repair volumes [1][3] - Tariff-driven volatility may reduce new vehicle sales, encouraging vehicle owners to repair rather than replace, thus increasing demand for parts and services [1][4] - The shift towards smart vehicles presents new growth opportunities, requiring adaptation to technology-heavy systems [1][5] Industry Overview - The industry includes companies that produce, market, and distribute replacement components for the automotive aftermarket, focusing on essential parts like engines, brakes, and gearboxes [2] - The auto replacement market is less sensitive to economic downturns as consumers prefer maintaining their vehicles over purchasing new ones [2] Key Themes - The trend of older cars requiring more repairs boosts demand for replacement parts, benefiting the industry as vehicles remain operational longer [3] - Economic uncertainty and higher vehicle prices are leading consumers to hold onto their cars, increasing the demand for repairs [4] - The advancement of vehicle technology necessitates specialized components and skilled technicians, creating new opportunities for growth [5] Cost Management and Innovation - While innovation drives growth, it also increases costs due to the need for R&D and skilled labor, making cost management essential for companies [6] Industry Ranking and Performance - The Zacks Automotive - Replacement Parts industry ranks 23, placing it in the top 9% of approximately 250 Zacks industries, indicating solid near-term prospects [7][8] - The industry's earnings estimates for 2025 have increased by 2% since the beginning of the year, reflecting growing analyst confidence [9] Market Performance - The industry has underperformed compared to the Auto, Tires, and Truck sector and the S&P 500 over the past year, declining by 5.4% [11] Valuation - The industry is currently trading at an EV/EBITDA ratio of 8.61X, significantly lower than the S&P 500's 16.71X and the sector's 21.62X [14] Investment Opportunities - **Dorman Products (DORM)**: A leading player in the automotive aftermarket, known for expanding its product lineup and maintaining a low debt-to-capitalization ratio of 25% [18] - DORM has consistently surpassed earnings estimates, with a consensus estimate for 2025 indicating year-over-year growth of 5% in sales and 10% in earnings [19] - **Standard Motor Products (SMP)**: A major manufacturer of automotive replacement parts, benefiting from strategic acquisitions and low exposure to tariffs [22] - SMP has also exceeded earnings estimates, with a consensus estimate for 2025 showing year-over-year growth of 17% in sales and 13% in earnings [23]
Buy These 5 Low-Leverage Stocks Amid Volatile Market Sentiment
ZACKS· 2025-05-30 15:16
Market Overview - The U.S. stock market displayed mixed signals on May 29, with the Nasdaq and S&P 500 gaining due to NVIDIA's strong quarterly results and a favorable ruling against Trump-imposed tariffs, while the Dow Jones declined amid economic outlook concerns and geopolitical uncertainties [1] Investment Strategy - In a volatile market, investors are advised to consider low-leverage stocks such as Novartis, ENGIE SA, MasTec, Dorman Products, and Sterling Infrastructure to mitigate potential losses [2] - Low-leverage stocks are preferred as they typically bear less financial risk, making them safer options during market turmoil [6][5] Understanding Leverage - Leverage refers to the practice of companies borrowing capital to operate and expand, primarily through debt financing, which can be risky if it does not yield returns exceeding the interest rate [4][5] - A lower debt-to-equity ratio indicates improved solvency and reduced financial risk for a company [7] Stock Selection Criteria - Stocks should have a debt-to-equity ratio lower than the industry median, a current price of at least $10, an average 20-day trading volume of 50,000 or more, and a percentage change in EPS greater than the industry median [11][12] - Additional criteria include a VGM Score of A or B, estimated one-year EPS growth greater than 5%, and a Zacks Rank of 1 or 2 [12] Company Highlights - **Novartis**: Launched a tender offer to acquire Regulus Therapeutics for $7.00 per share, potentially enhancing its RNA-targeted therapies pipeline. The Zacks Consensus Estimate for 2025 sales suggests a 7.1% improvement from 2024, with a long-term earnings growth rate of 7.9% [14][15] - **ENGIE SA**: Reported a 5.6% year-over-year revenue growth in Q1 2025 and has 8.5 GW of renewable and battery capacity under construction. The Zacks Consensus Estimate for 2025 earnings indicates a 22.9% year-over-year improvement [16][17] - **MasTec**: Announced a 6% year-over-year revenue increase in Q1 2025, with a Zacks Consensus Estimate for 2025 sales showing an 11% improvement and earnings expected to rise by 54.9% [17][18] - **Dorman Products**: Released hundreds of new automotive repair solutions, expanding its catalog and creating over 12 million new sales opportunities. The Zacks Consensus Estimate for 2025 sales indicates a 4.9% improvement [19][20] - **Sterling Infrastructure**: Reported a 7% year-over-year revenue increase in Q1 2025, with adjusted earnings per share surging by 29%. The company has a long-term earnings growth rate of 15% [21]
Dorman's Light Duty automotive segment announces more first-to-aftermarket repair solutions
GlobeNewswire News Room· 2025-05-29 11:00
Core Insights - Dorman Products, Inc. is launching hundreds of new automotive repair solutions, many of which are first-to-the-aftermarket products, expanding its catalog to over 138,000 SKUs [1] - The new products create approximately 12+ million new sales opportunities for aftermarket parts distributors, retailers, and repair shops, enhancing accessibility for vehicle owners [1] Company Overview - Dorman has been providing innovative aftermarket replacement products for over 100 years, aimed at saving time and money while increasing convenience and reliability for professionals and vehicle owners [4] - The company is a pioneering global organization with a diverse product catalog covering various vehicle types, including cars, trucks, and specialty vehicles [5] Product Highlights - New product offerings include a smart junction box for Dodge Dakota trucks, an automatic transmission oil cooler for Ford Super Duty trucks, a rugged third brake light for Jeep Gladiator trucks, and integrated door lock/tailgate lock actuators for select Ford, Chrysler, Jeep, and GM vehicles [7]