Financial Data and Key Metrics Changes - Consolidated net sales for Q2 2025 grew 8% year over year to $541 million, driven by strong volume growth from increased customer demand, particularly in the light duty business [6][20] - Adjusted operating margin for Q2 2025 was 16.3%, a 70 basis point increase over the previous year [7][21] - Adjusted diluted EPS for the quarter was $2.06, reflecting a 23% year over year increase [8][21] - Operating cash flow in Q2 was $9 million, significantly impacted by higher tariff costs and additional investments in inventory [8][28] Business Line Data and Key Metrics Changes - Light Duty business net sales increased 10% year over year in Q2, with segment operating margin rising to 18.5%, a 140 basis point improvement [22][23] - Heavy Duty segment achieved 1% growth despite market pressures, with a slight positive operating margin of 80 basis points [25] - Specialty Vehicle segment saw a 3% decline in net sales, but engagement in UTV and ATV ridership remained strong [26][27] Market Data and Key Metrics Changes - Vehicle miles traveled increased year over year, and the average age of light duty vehicles rose to 12.8 years, contributing to strong volume growth [10] - Market conditions in the trucking and freight industry remained soft, with tariffs creating economic uncertainty [11][25] Company Strategy and Development Direction - The company is focusing on diversifying its supplier base and implementing cost-saving measures to mitigate tariff impacts [13][14] - Long-term investments in product development and productivity initiatives are expected to drive sales growth and margin expansion [11][25] - The company aims to leverage its asset-light model and diversified supply chain as competitive advantages [10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continued momentum through 2025, despite existing uncertainties [9][31] - The company anticipates net sales growth in the range of 7% to 9% for 2025, an increase from previous guidance [15] - Adjusted diluted EPS guidance was raised to a range of $8.6 to $8.9, reflecting strong performance and pricing strategies [18] Other Important Information - The company paused share repurchases to preserve cash amid tariff-related uncertainties [28] - Total liquidity at the end of the quarter was $656 million, up from $642 million at the end of 2024 [30] Q&A Session Summary Question: What are the incremental margins for every dollar of sales recovery in the heavy duty segment? - Management indicated that the heavy duty business is more manufacturing-weighted, facing absorption issues when volume is challenged, but expects mid-teen operating profit levels when normalized [34][36] Question: What is the impact of tariffs by segment? - Management noted that the light duty segment has less exposure due to a diversified supply chain, while heavy duty has a modest impact from tariffs [37][38] Question: Can you elaborate on light duty customer POS and inventory? - Management confirmed that sell-out was low single digits, but sell-in growth was strong, with no significant inventory buy-ahead observed [44][46] Question: What initiatives are driving margin growth in light duty? - Management highlighted supply chain diversification, productivity improvements, and a focus on new products as key drivers of margin growth [57][59] Question: What is the capital allocation strategy? - The company aims to manage debt, invest internally for returns, pursue strategic M&A, and opportunistically repurchase shares [61]

Financial Data and Key Metrics Changes - Consolidated net sales for Q2 2025 grew 8% year over year to $541 million, driven by strong volume growth from increased customer demand, particularly in the light duty business [6][19] - Adjusted operating margin for Q2 2025 was 16.3%, a 70 basis point increase over the previous year [7][20] - Adjusted diluted EPS for the quarter was $2.06, reflecting a 23% year over year increase [20] Business Line Data and Key Metrics Changes - Light Duty business net sales increased 10% year over year in Q2, with segment operating margin rising to 18.5%, a 140 basis point improvement [21][22] - Heavy Duty segment achieved 1% net sales growth despite market pressures, with a slight positive operating margin of 80 basis points [23] - Specialty Vehicle segment saw a 3% decline in net sales compared to the previous year, but maintained strong engagement in UTV and ATV ridership [25] Market Data and Key Metrics Changes - Vehicle miles traveled increased year over year, and the average age of light duty vehicles rose to 12.8 years, contributing to strong volume growth [9] - Market conditions in the trucking and freight industry remained soft, impacting the Heavy Duty segment [23] Company Strategy and Development Direction - The company is focusing on diversifying its supplier base and implementing cost-saving measures to mitigate tariff impacts [12][13] - Long-term investments in product development and productivity initiatives are expected to drive sales growth and margin expansion [10][24] - The company aims to leverage its asset-light model and diversified supply chain as competitive advantages [9] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the future, citing strong performance in the first half of 2025 and an improved outlook for the remainder of the year [14][30] - The company anticipates net sales growth in the range of 7% to 9% for 2025, an increase from previous guidance [14] - Adjusted diluted EPS guidance was raised to a range of $8.6 to $8.9, reflecting strong performance and pricing strategies [16] Other Important Information - Operating cash flow in Q2 was $9 million, significantly impacted by higher tariff costs and increased inventory investments [27] - The company paused share repurchases to preserve cash amid market uncertainty [27][28] - Total liquidity at the end of the quarter was $656 million, up from $642 million at the end of 2024 [29] Q&A Session Summary Question: What are the incremental margins for every dollar of sales recovery in the heavy duty segment? - Management indicated that the heavy duty business is more manufacturing-weighted, and they expect mid-teen operating profit levels when normalized [34] Question: What is the impact of tariffs by segment? - Management noted that the light duty segment has less exposure due to a diversified supply chain, while heavy duty has a modest impact from tariffs [35][36] Question: Can you elaborate on light duty customer POS and inventory? - Management stated that sell-out was low single digits, but inventory levels were in line with historical data, with no significant pre-buying ahead of tariffs [40][41] Question: What initiatives are driving margin growth in light duty? - Management highlighted supply chain diversification, productivity improvements, and a focus on new products as key drivers of margin growth [52][54] Question: What is the capital allocation strategy? - The company aims to manage debt, invest internally for returns, pursue strategic M&A, and opportunistically repurchase shares [56]

DORMAN PRODUCTS, INC. could affect the Company's business, reputation, results of operations, financial condition, and stock price is included in the Company's filings with the Securities and Exchange Commission ("SEC"), including in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of the Company's most recently filed periodic reports on Form 10-K and Form 10-Q and subsequent filings. The Company is under no obligation to, and expressly ...

Core Insights - Dorman Products reported quarterly earnings of $2.06 per share, exceeding the Zacks Consensus Estimate of $1.76 per share, and showing an increase from $1.67 per share a year ago, resulting in an earnings surprise of +17.05% [1] - The company achieved revenues of $540.96 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 4.53% and up from $502.95 million year-over-year [2] - Dorman Products has consistently outperformed consensus EPS estimates over the last four quarters, achieving this four times [2] Earnings Outlook - The future performance of Dorman Products' stock will largely depend on management's commentary during the earnings call and the sustainability of the stock's immediate price movement based on recent earnings and future expectations [3][4] - The current consensus EPS estimate for the upcoming quarter is $1.96 on revenues of $522.91 million, and for the current fiscal year, it is $7.82 on revenues of $2.1 billion [7] Industry Context - The Automotive - Replacement Parts industry, to which Dorman Products belongs, is currently ranked in the bottom 22% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - The correlation between near-term stock movements and earnings estimate revisions suggests that investors should monitor these revisions closely to gauge future performance [5][6]

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]

[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 |

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].

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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].

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]