Dorman(DORM) - 2025 Q2 - Quarterly Results

Executive Summary & Highlights Second Quarter 2025 Performance Overview 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] - Cost savings from supply chain diversification, productivity, and automation initiatives contributed to bottom-line growth[3] | 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) 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] | 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 Consolidated Financial Performance 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 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 Updated 2025 Guidance (GAAP & Adjusted) 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] | 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 About Dorman Products 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] - The company offers an always-evolving catalog of replacement products for cars, trucks, and specialty vehicles, covering various components from chassis to electronics[13][14] - Products are engineered to save time and money and increase convenience and reliability[13] Conference Call and Investor Relations 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] - 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] - Investor Relations Contact: Alex Whitelam, VP, Investor Relations, awhitelam@dormanproducts.com, (445) 448-9522[18] Non-GAAP Measures Disclosure 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][25] - Management uses these non-GAAP measures for financial, operating, and planning decisions and performance evaluation[25] - 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] Forward-Looking Statements 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][17] - 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] - Readers are cautioned not to place undue reliance on these statements, and the company is under no obligation to update them[17] Consolidated Financial Statements (GAAP) Consolidated Statements of Operations 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 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 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 Adjusted Net Income and Diluted EPS Reconciliation 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 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 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 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] - Pretax acquisition-related transaction and other costs include costs incurred to complete and integrate acquisitions[32] - Pretax reduction in workforce costs represent costs incurred in connection with planned workforce reduction, including severance and other payroll-related costs[34] 2025 Guidance Non-GAAP Reconciliation 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 |