Part I [Business](index=5&type=section&id=ITEM%201.%20Business.) Dorman Products supplies motor vehicle aftermarket parts, emphasizing product development and a global supply chain, with significant customer concentration - As of December 31, 2024, the company marketed approximately **138,000 distinct parts**, an increase from 133,000 in the prior year[23](index=23&type=chunk) - The company operates in three sectors of the motor vehicle aftermarket: light-duty, heavy-duty, and powersports (specialty vehicles), with a combined estimated total addressable market of over **$165 billion in 2024**[24](index=24&type=chunk) - In 2024, two major customers accounted for approximately **39% of the company's net sales**[47](index=47&type=chunk) - The company's supply chain is global, with approximately **45% of products purchased from third-party suppliers in China** in 2024. No single supplier represented more than 10% of total product purchases[48](index=48&type=chunk) New Product Introductions (2022-2024) | Category | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | New to the aftermarket | 1,659 | 1,791 | 1,762 | | Line extensions | 3,676 | 4,315 | 3,667 | | **Total distinct parts introduced** | **5,335** | **6,106** | **5,429** | Employee Distribution by Function and Region (as of Dec 31, 2024) | Function | U.S. | Non-U.S. | Total | | :--- | :--- | :--- | :--- | | Operations | 2,604 | 232 | 2,836 | | Product Development | 210 | 1 | 211 | | Quality and Engineering | 176 | 79 | 255 | | Sales | 265 | 14 | 279 | | Administration | 197 | 9 | 206 | | **Total Employees** | **3,452** | **335** | **3,787** | [Risk Factors](index=12&type=section&id=ITEM%201A.%20Risk%20Factors) The company faces risks from intense competition, customer concentration, global supply chain reliance, cyber-attacks, and significant debt - A significant portion of sales is concentrated among a few customers. In 2024, two customers accounted for about **39% of net sales**, posing a risk if their purchasing behavior changes[73](index=73&type=chunk) - The company is exposed to U.S. trade policy changes, as approximately **72% of its products were purchased from non-U.S. suppliers** in 2024, which could be affected by tariffs and duties[91](index=91&type=chunk)[120](index=120&type=chunk) - Cyber-attacks pose a significant threat to operations and data security. The company acknowledges the increasing frequency and sophistication of such attacks, including those leveraging AI[104](index=104&type=chunk) - The company has significant debt, including a **$500.0 million term loan** and a **$600.0 million revolving credit facility**. As of December 31, 2024, **$468.8 million was outstanding on the term loan** and **$14.0 million on the revolver**[109](index=109&type=chunk) - The Non-Executive Chairman, Steven L. Berman, and his family beneficially owned approximately **15% of the company's outstanding common stock** as of February 24, 2025, allowing them to influence shareholder matters[122](index=122&type=chunk) [Unresolved Staff Comments](index=26&type=section&id=ITEM%201B.%20Unresolved%20Staff%20Comments.) The company reports no unresolved staff comments - None[137](index=137&type=chunk) [Cybersecurity](index=26&type=section&id=ITEM%201C.%20Cybersecurity) The company manages cybersecurity risk via a NIST-aligned program overseen by the Audit Committee, reporting no material incidents in 2024 - The company's information security program is managed by an experienced team and includes biannual maturity assessments against the NIST Cybersecurity Framework conducted by a third party[138](index=138&type=chunk) - Oversight is provided by the Audit Committee of the Board of Directors, with the Senior Vice President and Chief Information Officer (CIO) responsible for the program's operation[139](index=139&type=chunk)[140](index=140&type=chunk) - To date, the company has not identified any cybersecurity incidents or threats that have materially affected or are reasonably likely to materially affect its business strategy, operations, or financial condition[138](index=138&type=chunk) [Properties](index=28&type=section&id=ITEM%202.%20Properties.) Dorman Products operates 38 global warehouse and office facilities, primarily leased, with key locations in Tennessee, Indiana, and Kentucky Principal Facilities | Location | Description | Size (sq. ft.) | Ownership | | :--- | :--- | :--- | :--- | | Portland, TN | Warehouse and office | 997,310 | Leased | | Whiteland, IN | Warehouse and office | 827,180 | Leased | | Warsaw, KY | Warehouse and office | 710,500 | Owned | | Shepherdsville, KY | Warehouse | 436,716 | Leased | | Colmar, PA | Corporate headquarters, Warehouse and office | 342,000 | Leased | - The company leases certain facilities from entities affiliated with its Non-Executive Chairman, Steven L. Berman, and its President, Specialty Vehicles, Lindsay Hunt, with aggregate rent payments of **$3.5 million in 2024**[147](index=147&type=chunk) [Legal Proceedings](index=28&type=section&id=ITEM%203.%20Legal%20Proceedings.) The company is involved in routine legal proceedings, none of which are expected to have a material financial impact - Information regarding legal proceedings is incorporated by reference from Note 11, "Commitments and Contingencies," under the heading "Other Contingencies"[146](index=146&type=chunk) [Mine Safety Disclosures](index=28&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosures.) This item is not applicable to the company - Not Applicable[147](index=147&type=chunk) [Information about Our Executive Officers](index=29&type=section&id=ITEM%204.1.%20Information%20about%20Our%20Executive%20Officers.) This section lists the company's executive officers as of February 27, 2025, including their roles and brief professional biographies - The executive team is led by Kevin M. Olsen, President and Chief Executive Officer, who has been with the company since 2016 and CEO since 2019[148](index=148&type=chunk) - The company has dedicated presidents for each of its key business segments: Tayfun Uner (Light Duty), John R. McKnight (Heavy Duty), and Lindsay Hunt (Specialty Vehicles)[148](index=148&type=chunk) Part II [Market for Registrant's Common Equity, Related Shareholder Matters, and Issuer Purchases of Equity Securities](index=32&type=section&id=ITEM%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Shareholder%20Matters%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities.) Dorman's common stock trades on NASDAQ, with no anticipated dividends, and a new $500 million share repurchase program approved for 2025-2027 - The company's common stock is traded on the NASDAQ Global Select Market under the symbol "DORM"[161](index=161&type=chunk) - The company does not currently pay cash dividends and does not anticipate doing so in the foreseeable future[162](index=162&type=chunk) - A new share repurchase program was authorized in October 2024, allowing for the purchase of up to **$500 million of common stock** from January 1, 2025, to December 31, 2027[167](index=167&type=chunk) Share Repurchases (Q4 2024) | Period | Total Number of Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | Oct 27 - Nov 23, 2024 | 4,808 | $124.13 | | Nov 24 - Dec 31, 2024 | 2,235 | $129.89 | | **Total** | **7,043** | **-** | [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=34&type=section&id=ITEM%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) In FY2024, Dorman achieved 4.1% net sales growth to $2.01 billion and 47% net income growth to $190.0 million, driven by improved gross margin and strong cash flow Financial Performance Summary (FY 2024 vs. FY 2023) | Metric (in millions) | 2024 | 2023 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $2,009.2 | $1,929.8 | +4.1% | | Gross Profit | $806.4 | $685.4 | +17.6% | | Gross Margin | 40.1% | 35.5% | +460 bps | | Income from Operations | $292.9 | $214.8 | +36.4% | | Net Income | $190.0 | $129.3 | +47.0% | Segment Net Sales (FY 2024 vs. FY 2023) | Segment (in millions) | 2024 | 2023 | Change | | :--- | :--- | :--- | :--- | | Light Duty | $1,565.6 | $1,462.5 | +7.1% | | Heavy Duty | $231.5 | $256.9 | -9.9% | | Specialty Vehicle | $212.1 | $210.4 | +0.8% | | **Total** | **$2,009.2** | **$1,929.8** | **+4.1%** | - Cash flow from operations increased to **$231.0 million** in 2024 from $208.8 million in 2023, driven by higher net income[219](index=219&type=chunk) - The company sold approximately **$1.11 billion of accounts receivable** in 2024 through customer-sponsored programs, incurring **$51.3 million in factoring costs**[214](index=214&type=chunk)[215](index=215&type=chunk) - As of Dec 31, 2024, the company had **$482.8 million in total obligations** under its credit agreement, with **$584.8 million available for borrowing**[212](index=212&type=chunk)[217](index=217&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=43&type=section&id=ITEM%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk.) The company's primary market risk is interest rate fluctuations, impacting variable-rate debt and accounts receivable factoring programs - The company is exposed to interest rate risk through its variable-rate debt and accounts receivable sales programs, which are tied to rates like Term SOFR[234](index=234&type=chunk) - A one-percentage-point increase in interest rates would have increased interest expense on variable rate debt by approximately **$5.6 million** for FY 2024[236](index=236&type=chunk) - A one-percentage-point increase in discount rates on accounts receivable sales programs would have increased factoring costs by approximately **$8.8 million** for FY 2024[235](index=235&type=chunk) [Financial Statements and Supplementary Data](index=43&type=section&id=ITEM%208.%20Financial%20Statements%20and%20Supplementary%20Data.) This section presents audited financial statements and KPMG's unqualified opinion, highlighting a critical audit matter regarding customer credit accruals [Report of Independent Registered Public Accounting Firm](index=44&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) KPMG issued unqualified opinions on Dorman's financial statements and internal controls, identifying customer credit accruals as a critical audit matter - The auditor, KPMG LLP, issued an unqualified (clean) opinion on both the consolidated financial statements and the company's internal control over financial reporting[240](index=240&type=chunk)[241](index=241&type=chunk) - A Critical Audit Matter (CAM) was identified related to the 'Accrual for customer credits for defective product returns'. This was due to the subjective auditor judgment needed to evaluate the impact of market conditions on the time lag between a sale and a credit issuance[245](index=245&type=chunk)[247](index=247&type=chunk) [Consolidated Financial Statements](index=46&type=section&id=Consolidated%20Financial%20Statements) Dorman's 2024 financial statements show $2.01 billion net sales, $190.0 million net income, and $231.0 million cash from operations Consolidated Statement of Operations Highlights (FY 2024) | Metric (in thousands) | Amount | | :--- | :--- | | Net Sales | $2,009,197 | | Gross Profit | $806,359 | | Income from Operations | $292,909 | | Net Income | $190,004 | | Diluted EPS | $6.14 | Consolidated Balance Sheet Highlights (as of Dec 31, 2024) | Metric (in thousands) | Amount | | :--- | :--- | | Total Current Assets | $1,369,760 | | Total Assets | $2,424,521 | | Total Current Liabilities | $563,802 | | Total Liabilities | $1,131,051 | | Total Shareholders' Equity | $1,293,470 | Consolidated Statement of Cash Flows Highlights (FY 2024) | Metric (in thousands) | Amount | | :--- | :--- | | Cash provided by operating activities | $231,047 | | Cash used in investing activities | $(39,321) | | Cash used in financing activities | $(170,979) | | Net Increase in Cash | $20,323 | [Notes to Consolidated Financial Statements](index=50&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail accounting policies, segment performance, credit facility terms, revenue recognition, stock compensation, and related-party transactions - The company's three reportable segments are Light Duty, Heavy Duty, and Specialty Vehicle[311](index=311&type=chunk)[312](index=312&type=chunk) - The company has a credit agreement consisting of a **$600.0 million revolving credit facility** and a **$500.0 million term loan**, both maturing on October 4, 2027[306](index=306&type=chunk) - In 2024, two customers accounted for over **10% of net sales**, totaling **39% of consolidated net sales**[340](index=340&type=chunk) - The company has contingent consideration liabilities from prior acquisitions, with a maximum potential payout of **$102.0 million**. As of December 31, 2024, no liability was accrued as payments were not expected to be due[327](index=327&type=chunk)[328](index=328&type=chunk) - The company repurchased and canceled **855,971 shares for $78.1 million** under its share repurchase program in 2024[359](index=359&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=70&type=section&id=ITEM%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure.) The company reports no changes in or disagreements with its accountants regarding accounting and financial disclosure - None[363](index=363&type=chunk) [Controls and Procedures](index=70&type=section&id=ITEM%209A.%20Controls%20and%20Procedures.) Management and KPMG affirmed the effectiveness of disclosure controls and internal control over financial reporting as of December 31, 2024 - The CEO and CFO concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of December 31, 2024[364](index=364&type=chunk) - Management concluded that the company's internal control over financial reporting was effective as of December 31, 2024, a conclusion supported by an unqualified attestation report from KPMG LLP[365](index=365&type=chunk)[366](index=366&type=chunk) - There were no changes in internal control over financial reporting during the fourth quarter of 2024 that materially affected, or are reasonably likely to materially affect, these controls[367](index=367&type=chunk) [Other Information](index=73&type=section&id=ITEM%209B.%20Other%20Information.) The company amended its Cash Bonus Plan and disclosed Rule 10b5-1 trading plans by officers and directors in Q4 2024 - The Dorman Products, Inc. 2018 Cash Bonus Plan was amended and restated on February 21, 2025, to remove the **$2 million limit** on payments to any participant in a plan year[378](index=378&type=chunk) - During Q4 2024, several officers and directors, including Donna M. Long, Jeffrey L. Darby, and Steven L. Berman, adopted Rule 10b5-1 trading plans for the purchase or sale of company stock[379](index=379&type=chunk)[380](index=380&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=73&type=section&id=ITEM%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections.) This item is not applicable to the company - None[381](index=381&type=chunk) Part III [Directors, Executive Officers, and Corporate Governance](index=74&type=section&id=ITEM%2010.%20Directors%2C%20Executive%20Officers%2C%20and%20Corporate%20Governance.) Information on directors, executive officers, and corporate governance is incorporated by reference from the 2025 proxy statement - The required information is incorporated by reference from the company's definitive proxy statement for its 2025 Annual Meeting of Shareholders[383](index=383&type=chunk) - The company has adopted a "Code of Ethics for Senior Financial Officers," which is available on its website[383](index=383&type=chunk) [Executive Compensation](index=74&type=section&id=ITEM%2011.%20Executive%20Compensation.) Executive and director compensation details are incorporated by reference from the 2025 proxy statement - The required information is incorporated by reference from the company's definitive proxy statement for its 2025 Annual Meeting of Shareholders[384](index=384&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters](index=74&type=section&id=ITEM%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Shareholder%20Matters.) Security ownership and equity compensation plan details are incorporated by reference from the 2025 proxy statement - Most of the required information is incorporated by reference from the company's definitive proxy statement for its 2025 Annual Meeting of Shareholders[385](index=385&type=chunk) Equity Compensation Plan Information (as of Dec 31, 2024) | Plan Category | Securities to be issued upon exercise (a) | Weighted-average exercise price (b) | Securities available for future issuance (c) | | :--- | :--- | :--- | :--- | | Equity compensation plans approved by security holders | 234,289 | $89.44 | 1,083,572 | | Equity compensation plans not approved by security holders | — | — | — | | **Total** | **234,289** | **$89.44** | **1,083,572** | [Certain Relationships and Related Transactions, and Director Independence](index=75&type=section&id=ITEM%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence.) Information on related-party transactions and director independence is incorporated by reference from the 2025 proxy statement - The required information is incorporated by reference from the company's definitive proxy statement for its 2025 Annual Meeting of Shareholders[386](index=386&type=chunk) [Principal Accounting Fees and Services](index=75&type=section&id=ITEM%2014.%20Principal%20Accounting%20Fees%20and%20Services.) Principal accounting fees and services information is incorporated by reference from the 2025 proxy statement - The required information is incorporated by reference from the company's definitive proxy statement for its 2025 Annual Meeting of Shareholders[386](index=386&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=76&type=section&id=ITEM%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules.) This section lists all consolidated financial statements, schedules, and exhibits filed with the Form 10-K - This section provides a comprehensive list of all financial statements, schedules, and exhibits filed as part of the Form 10-K[388](index=388&type=chunk)[391](index=391&type=chunk) - Financial Statement Schedule II - Valuation and Qualifying Accounts is included in the filing[389](index=389&type=chunk) [Form 10-K Summary](index=76&type=section&id=ITEM%2016.%20Form%2010-K%20Summary) No Form 10-K summary was provided - None[390](index=390&type=chunk) [Schedule II: Valuation and Qualifying Accounts](index=82&type=section&id=SCHEDULE%20II%3A%20Valuation%20and%20Qualifying%20Accounts) This schedule details changes in the allowance for doubtful accounts and customer credits for fiscal years 2022-2024 Valuation and Qualifying Accounts (in thousands) | Account | Balance at Dec 31, 2023 | Provision | Charge-offs | Balance at Dec 31, 2024 | | :--- | :--- | :--- | :--- | :--- | | Allowance for doubtful accounts | $3,518 | $90 | $(1,989) | $1,619 | | Allowance for customer credits | $204,495 | $419,611 | $(419,751) | $204,355 |

Dorman Products (DORM) Q4 2024 Earnings Call February 27, 2025 03:18 PM ET Company Participants Alexander Whitelam - Vice President - IRKevin Olsen - President, CEO & DirectorDavid Hession - Senior VP, CFO & TreasurerGary Prestopino - Managing DirectorJustin Ages - Director - Equity ResearchBret Jordan - Managing Director Conference Call Participants Scott Stember - Executive Director & Senior Research Analyst Operator Good morning and thank you for standing by. Welcome to the Dormant Products Fourth Quarte ...

Financial Performance and Key Metrics - The company achieved over $2 billion in annual sales for the first time, with a year-over-year net sales growth of 4.1% [8][10] - Consolidated net sales for Q4 2024 were $534 million, an 8% increase year-over-year, driven by strong customer demand [13][30] - Adjusted operating margin for Q4 was 17.5%, expanding 210 basis points compared to the same period last year [14][33] - Adjusted diluted EPS increased by 40% to $2.20 for the quarter [15][33] - Free cash flow for Q4 was $63 million, allowing for $54 million in debt repayment [15][41] Business Segment Performance - Light Duty segment saw net sales increase by 11% year-over-year, with a segment profit margin of 20.1%, up 350 basis points [35][36] - Heavy Duty segment experienced an 8% decline in net sales due to ongoing market challenges, with plans for new product development to capture market share when conditions improve [37][28] - Specialty Vehicles segment reported a 5% increase in net sales, driven by new product initiatives and an expanded dealer network [39][28] Market Data and Key Metrics - Vehicle miles traveled increased year-over-year, contributing to strong POS growth in the Light Duty segment [26] - The Heavy Duty market remains soft, with delayed repairs impacting sales performance [78][81] - Specialty Vehicle market showed signs of stabilization, but inflation and high interest rates continue to affect new machine acquisition [96] Company Strategy and Industry Competition - The company emphasizes innovation as a core strategy, focusing on new product development and operational excellence [16][20] - Plans to diversify and optimize the supply chain to enhance flexibility and reduce country-specific concentration [23] - The acquisition pipeline remains robust, with expectations for improved M&A activity as trade uncertainties clear [24][69] Management Commentary on Operating Environment and Future Outlook - Management expressed confidence in the operational model and strategic growth opportunities for 2025, despite uncertainties around tariffs and macroeconomic factors [46][48] - The company expects net sales growth of 3% to 5% in 2025, with light duty driving solid sales growth [48][49] - Heavy Duty segment is expected to see flattish sales growth, while Specialty Vehicle is projected to experience modest growth [49] Other Important Information - The company has a new $500 million stock repurchase plan effective January 1, 2025, expiring in December 2027 [42][94] - The balance sheet remains strong, with net debt reduced to $426 million and total liquidity at $642 million [43][44] Q&A Session Summary Question: Update on tariff exposure related to China - Management indicated that approximately 30% of purchases will come from the U.S. in 2025, with 30% to 40% from China, making the current tariff situation manageable [61][60] Question: Early signs in the heavy-duty market and channel expansion - Management noted that the heavy-duty market is stabilizing, with a focus on new product launches and productivity initiatives [64][65] Question: Heavy-duty market performance drivers - Delayed repairs are impacting the heavy-duty market, with expectations for a robust ramp-up once the market inflects [78][81] Question: M&A pipeline opportunities - The M&A pipeline is robust across all segments, but activity has slowed due to trade uncertainties [69] Question: Capital allocation priorities - The company prioritizes debt management, internal investments, and then M&A, with share buybacks being opportunistic [93][94] Question: Specialty Vehicle market dynamics - The Specialty Vehicle market is down overall, but the company has focused on non-discretionary repair parts and channel expansion to outperform [97][96] Question: Margin profile of complex electronics - Complex electronics within the light vehicle segment have a strong margin profile, typically outperforming the overall business [108] Question: Inflation rate and pricing outlook - Management anticipates a low single-digit inflation rate in the absence of tariffs, with general inflation affecting costs [111]

DORMAN PRODUCTS, INC. Q4 2024 EARNINGS PRESENTATION FEBRUARY 27, 2025 TDORMANT Forward-Looking Statements & Non-GAAP Financial Measures FORWARD-LOOKING STATEMENTS This presentation contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, may be forward-looking statements. Words such as "may," "will," "should," "likely," "probably," "anticipates," "expects," "intends," "plans," "projects," "bel ...

Group 1 - Dorman Products reported quarterly earnings of $2.20 per share, exceeding the Zacks Consensus Estimate of $1.97 per share, and up from $1.57 per share a year ago, representing an earnings surprise of 11.68% [1] - The company achieved revenues of $533.77 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 1.68% and increasing from $494.3 million year-over-year [2] - Dorman Products has outperformed consensus EPS estimates in all four of the last quarters and has topped consensus revenue estimates twice during the same period [2] Group 2 - The stock has underperformed the market with a decline of about 3.1% since the beginning of the year, while the S&P 500 has gained 1.3% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to those expectations [4] - The current consensus EPS estimate for the upcoming quarter is $1.50 on revenues of $482.23 million, and for the current fiscal year, it is $7.54 on revenues of $2.09 billion [7] Group 3 - The Automotive - Replacement Parts industry, to which Dorman Products belongs, is currently ranked in the top 23% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5] - Dorman Products currently holds a Zacks Rank 3 (Hold), indicating that the shares are expected to perform in line with the market in the near future [6]

Financial Performance - Total net sales for Q4 2024 were $533.8 million, an increase of 8.0% compared to $494.3 million in Q4 2023[5]. - Diluted EPS for Q4 2024 was $1.77, up 11% from $1.60 in the same quarter last year; adjusted diluted EPS was $2.20, up 40% from $1.57[9]. - For the full year 2024, net sales reached $2.009 billion, a 4.1% increase from $1.930 billion in 2023[10]. - Adjusted net income for the twelve months ended December 31, 2024, was $220,697 thousand, a significant increase of 54.3% from $143,175 thousand in the previous year[27]. - The company reported a diluted earnings per share (GAAP) of $6.14 for the twelve months ended December 31, 2024, compared to $4.10 in the previous year, reflecting a 49.4% increase[27]. Profitability Metrics - Gross profit for Q4 2024 was $221.7 million, representing 41.5% of net sales, compared to 39.3% in Q4 2023[6]. - Adjusted gross margin for the full year 2024 was 40.2%, up from 36.1% in the prior year[10]. - Gross profit margin improved to 40.2% for the twelve months ended December 31, 2024, compared to 36.1% for the same period in 2023[29]. - SG&A expenses for Q4 2024 were $135.0 million, or 25.3% of net sales, compared to $117.0 million, or 23.7% in Q4 2023[7]. - SG&A expenses as a percentage of net sales decreased to 24.1% for the twelve months ended December 31, 2024, down from 24.4% in 2023[32]. Cash Flow and Capital Management - The company generated $231 million in cash from operating activities for the full year, allowing for a $94 million reduction in debt and $78 million in stock repurchases[4]. - Cash provided by operating activities for the twelve months ended December 31, 2024, was $231,047 thousand, an increase of 10.7% compared to $208,758 thousand for the same period in 2023[25]. - Capital expenditures for the twelve months ended December 31, 2024, were $39,421 thousand, a decrease of 10.3% from $43,968 thousand in 2023[25]. Segment Performance - Light Duty segment net sales for Q4 2024 were $427.4 million, up 11% from $385.9 million in Q4 2023, with a profit margin increase of 350 basis points[9]. - Heavy Duty segment net sales decreased by 8% to $52.9 million in Q4 2024, with a profit margin decline of 470 basis points[9]. Guidance and Projections - For 2025, the company expects net sales growth of 3% to 5% and diluted EPS in the range of $7.00 to $7.30[5][14]. - The company provided guidance for fiscal 2025 with diluted earnings per share (GAAP) ranging from $7.00 to $7.30[41]. - Adjusted diluted earnings per share (Non-GAAP) is projected to be between $7.55 and $7.85 for fiscal 2025[41]. - Weighted average diluted shares outstanding is estimated at 30,800 for fiscal 2025[41]. Balance Sheet Highlights - Total assets increased to $2,424,521 thousand as of December 31, 2024, up from $2,292,407 thousand a year earlier, representing a growth of 5.8%[24]. - Total current liabilities increased slightly to $563,802 thousand as of December 31, 2024, from $547,151 thousand a year earlier, marking a 3.0% rise[24]. - The company’s retained earnings increased to $1,180,862 thousand as of December 31, 2024, up from $1,069,435 thousand in the previous year, indicating a growth of 10.4%[24]. Other Financial Adjustments - Fair value adjustments to contingent consideration totaled $7.1 million pretax and $20.5 million pretax for the three and twelve months ended December 31, 2023, respectively[4]. - Workforce reduction costs amounted to $5.0 million pretax for the twelve months ended December 31, 2024[5]. - Discrete tax adjustment for state tax matters totaled $8.1 million during the three and twelve months ended December 31, 2024[6]. - Tax adjustments totaled $(1.7) million and $(7.5) million during the three and twelve months ended December 31, 2024, respectively[7].

Core Insights - Dorman Products, Inc. reported strong financial results for Q4 and full year 2024, with net sales increasing by 8% in Q4 and 4.1% for the full year, driven by performance in Light Duty and Specialty Vehicle segments [3][5][9]. Financial Performance - Q4 2024 net sales reached $533.8 million, up from $494.3 million in Q4 2023, marking an 8% increase [5][10]. - Full year 2024 net sales totaled $2,009.2 million, compared to $1,929.8 million in 2023, reflecting a 4.1% growth [9][10]. - Gross profit for Q4 2024 was $221.7 million, representing 41.5% of net sales, an increase from 39.3% in Q4 2023 [6][10]. - For the full year 2024, gross profit was $806.4 million, or 40.1% of net sales, up from 35.5% in the prior year [11][12]. Earnings Metrics - Diluted EPS for Q4 2024 was $1.77, an 11% increase from $1.60 in Q4 2023, while adjusted diluted EPS rose 40% to $2.20 [8][10]. - Full year diluted EPS was $6.14, a 50% increase from $4.10 in 2023, with adjusted diluted EPS at $7.13, up 57% from $4.54 [12][10]. Segment Performance - In Q4 2024, Light Duty segment sales were $427.4 million, up 11% from $385.9 million in Q4 2023, with a profit margin increase of 350 basis points [8]. - Heavy Duty segment sales decreased by 8% to $52.9 million, with a profit margin decline of 470 basis points [8]. - Specialty Vehicle segment sales increased by 5% to $53.5 million, with a profit margin decrease of 350 basis points [8]. Cash Flow and Capital Management - Cash from operating activities for 2024 was $231 million, enabling the company to reduce debt by $94 million and repurchase $78 million in common stock [4][10]. - The company reported a significant increase in cash flow, with Q4 cash from operating activities at $71 million, compared to $59.6 million in Q4 2023 [27]. 2025 Guidance - Dorman Products expects net sales growth of 3% to 5% for 2025, with diluted EPS projected between $7.00 and $7.30, and adjusted diluted EPS between $7.55 and $7.85 [5][14].

Core Points - Dorman Products, Inc. will report its financial results for Q4 and the full year ended December 31, 2024, after the Nasdaq market closes on February 26, 2025 [1] - A conference call and webcast to discuss these financial results is scheduled for February 27, 2025, at 8 a.m. ET [2] Company Overview - Dorman Products has been providing aftermarket replacement products for over 100 years, aimed at saving time and money for professionals and vehicle owners [3] - The company is a global organization with a diverse catalog of products for various types of vehicles, including cars, trucks, and specialty vehicles [4]

Core Insights - Dorman Products, Inc. has appointed Tayfun Uner as President of Light Duty, a newly-created role aimed at driving strategic growth and overseeing the largest business segment [1][2] - Uner brings extensive experience from consumer goods, having previously served as Senior Vice President at Newell Brands and held strategic positions at McKinsey & Company, Procter & Gamble, and Carlsberg Breweries [2] - The appointment is part of Dorman's effort to formalize leadership structures across its three business segments, enhancing operational efficiency and growth potential [2] Company Overview - Dorman Products has been providing innovative repair solutions for over 100 years, offering a wide range of aftermarket replacement products designed to save time and money for repair professionals and vehicle owners [3][4] - The company operates globally, with a diverse catalog of products that includes components for cars, trucks, and specialty vehicles, covering various aspects from chassis to complex electronics [4]

Industry Overview - The Zacks Automotive - Replacement Parts industry focuses on the production, marketing, and distribution of replacement components for the automotive aftermarket, including essential parts like engine, steering, and brakes [3] - The industry is less exposed to economic downturns as consumers prefer to repair older vehicles rather than purchase new ones, leading to consistent demand for replacement parts [3] Key Investing Themes - The average age of vehicles in the U.S. reached an all-time high of 12.6 years in 2024, driving demand for automotive replacement parts due to the need for more frequent repairs and maintenance [4] - The shift towards electrification, autonomy, and digitization in the automotive industry is creating new growth opportunities in the replacement parts market, requiring advanced components and skilled technicians [5] Industry Performance - The Zacks Automotive - Replacement Parts industry has underperformed compared to the Auto, Tires, and Truck sector and the S&P 500, declining 17% over the past year while the sector and S&P 500 grew by 27% and 29%, respectively [9] - The industry is currently trading at an EV/EBITDA ratio of 8.8X, significantly lower than the S&P 500's 18.84X and the sector's 22.78X, indicating an attractive valuation [10] Company Highlights Dorman Products - Dorman Products is a key player in the aftermarket industry, focusing on replacement and upgrade parts, with a strong balance sheet and a debt-to-capitalization ratio of 28% [11] - The company has consistently surpassed earnings estimates, with an average surprise of 35%, and is expected to see year-over-year growth of 4% in sales and 9% in earnings for 2025 [12] Standard Motor Products - Standard Motor Products is a leading manufacturer of automotive replacement parts, with a focus on engine management and temperature control systems, and has expanded its geographic presence through the acquisition of Nissens [20] - The company has a long-term debt-to-capital ratio of 0.17, lower than the industry average, and has repurchased $10.4 million of shares in the first nine months of 2024 [20] - The Zacks Consensus Estimate for Standard Motor's 2025 sales and earnings implies year-over-year growth of 2.3% and 11.3%, respectively [21]