COLMAR, Pa., April 26, 2021 (GLOBE NEWSWIRE) — Dorman Products, Inc. (NASDAQ:DORM), a leading supplier in the automotive aftermarket industry, today announced its financial results for the first quarter ended March 27, 2021.
First Quarter Financial Results
The Company reported first quarter 2021 net sales of $288.0 million, up 12% as compared to net sales of $257.7 million in the first quarter of 2020. Strong sales performance in the quarter was all organic and driven by robust customer demand.
Gross profit was $104.5 million in the first quarter of 2021, or 36.3% of net sales, compared to $84.8 million, or 32.9% of net sales for the same quarter last year. Adjusted gross margin* was 36.3% in the first quarter of 2021 compared to 33.0% in the same quarter last year. Gross margin expansion was driven by increased efficiencies as part of the Company’s ongoing efforts to streamline its end-to-end supply chain processes. Additionally, the Company benefitted from the absence of increased customer provisions that impacted gross margin in the prior year quarter. These benefits were partially offset by increased freight costs due to global transportation and logistics constraints.
Selling, general and administrative (“SG&A”) expenses were $62.9 million, or 21.8% of net sales, in the first quarter of 2021 compared to $59.7 million, or 23.2% of net sales, in the same quarter last year. Adjusted SG&A expenses* were $62.0 million, or 21.5% of net sales, in the first quarter of 2021 compared to $58.4 million, or 22.6% of net sales, in the same quarter last year. Approximately 170 basis points of the decrease in SG&A as a percentage of net sales was due to improved leverage from the $30 million increase in net sales in the first quarter of 2021 as compared to the first quarter of 2020. Additionally, Dorman drove increased operational efficiencies, which were partially offset by increased wage and benefit inflation as compared to the prior year quarter.
Income tax expense was $8.9 million in the first quarter of 2021, or 21.3% of income before income taxes, compared to $4.9 million, or 17.8% of income before income taxes, recorded in the same quarter last year.
Net income for the first quarter of 2021 was $32.7 million, or $1.02 per diluted share, compared to $22.8 million, or $0.70 per diluted share, in the prior year quarter. Adjusted net income* in the first quarter of 2021 was $33.4 million, or $1.04 per diluted share, compared to $21.3 million, or $0.66 per diluted share, in the prior year quarter.
Kevin Olsen, Dorman Products’ President and Chief Executive Officer, stated, “I am pleased to report a strong start to the fiscal year as we continue to execute on our strategic priorities. Our net sales performance was driven by robust demand, as we saw consistent order strength throughout the quarter. While we saw modest growth with ‘Do-It-For-Me’ focused customers, we saw particular strength with ‘Do-It-Yourself’ focused customers, consistent with trends across the automotive aftermarket. Our diversified supply chain and broad supplier network remain critical to delivering for our customers as pressures on the global supply network continue to cause logistical issues, including higher freight and material inflation costs. Despite those pressures, our focus on driving productivity across our operations continued to bear fruit, as we achieved significant year-over-year efficiency improvements, resulting in gross margin growth for the quarter. Finally, bringing new and innovative solutions to the automotive aftermarket remains a strategic priority for Dorman. Examples of some of the innovative solutions we recently launched during the first quarter include pre-pressed axles, blind spot detection modules, and cruise control distance sensors. We intend to continue to build on the strength of our new product development, including by capitalizing on the increased adoption of complex electronics in today’s vehicles, a key area of our innovation efforts this year.”
2021 Guidance
The Company expects fiscal 2021 net sales between $1,191 million and $1,224 million, representing growth between 9%-12% over 2020 net sales. The Company also expects 2021 diluted EPS between $4.32 and $4.52, an increase of 31% to 37% year-over-year, and adjusted diluted EPS* between $4.40 and $4.60, reflecting an increase of 28% to 33% year-over-year.
Mr. Olsen stated, “While the environment remains very fluid, we are issuing full-year guidance today, which reflects our expectations for our performance given our results year to date, visibility into the remainder of the year, and the expectation that automotive aftermarket industry dynamics will continue to improve as we move through 2021. We anticipate the cost pressures from global transportation and logistics constraints and other inflationary pressures to continue, and our guidance includes plans to mitigate the impact of these items. Importantly, our balance sheet and liquidity are strong, and we are well-positioned to execute on our strategic priorities.”
The Company’s guidance does not include the impact from potential future acquisitions or related financings or potential impacts from any further possible government-mandated shutdowns, as well as any potential impact from supply chain disruptions caused by the ongoing COVID-19 pandemic.
Share Repurchases
Dorman repurchased 36,000 shares of its common stock for $3.8 million at an average share price of $104.53 during the quarter ended March 27, 2021. The Company has $203.4 million remaining under its current share repurchase authorization.
About Dorman Products
At Dorman, we give repair professionals and vehicle owners greater freedom to fix cars and trucks by focusing on solutions first. For over 100 years, we have been one of the automotive aftermarket’s pioneering problem solvers, releasing tens of thousands of replacement products engineered to save time and money and increase convenience and reliability.
Founded and headquartered in the United States, we are a global organization offering more than 81,000 distinct parts, covering both light-duty and heavy-duty vehicles, from chassis to body, from underhood to undercar, and from hardware to complex electronics. See our full offering and learn more at DormanProducts.com.
