Dorman Products, Inc 10-Q for FY2020 Q3

About this 10-Q

Headline figures

Dorman Products, Inc. (DORM)

10-Q 2020-10-29 For: 2020-09-26

Added on April 04, 2026

Dorman Products, Inc filed this 10-Q on October 29, 2020, covering the quarter ended September 26, 2020 (FY2020 Q3).

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

Quarter ended September 26, 2020, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $300.62M; up 18.4% from $253.8M a year earlier
Net income: $34.26M; up 60.8% from net income of $21.31M a year earlier
Diluted EPS: $1.06; up 63.1% from $0.65 a year earlier

Search and read filings like this one from Claude or ChatGPT with the SEC filings MCP server →

Pennsylvania		23-2078856
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

3400 East Walnut Street, Colmar, Pennsylvania		18915
(Address of principal executive offices)		(Zip Code)

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common stock, par value $0.01 per share		DORM		NASDAQ Global Select Market

				Page
Part I — FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited)

		Condensed Consolidated Statements of Operations			3

			Condensed Consolidated Balance Sheets			4

			Condensed Consolidated Statements of Shareholders’ Equity			5

			Condensed Consolidated Statements of Cash Flows			6

			Notes to Condensed Consolidated Financial Statements			7

Item 2.			Management’s Discussion and Analysis of Financial Condition and Results of Operations			13

Item 3.			Quantitative and Qualitative Disclosures About Market Risk			19

Item 4.			Controls and Procedures			19

Part II — OTHER INFORMATION

Item 1.			Legal Proceedings			20

Item 1A.			Risk Factors			20

Item 2.			Unregistered Sales of Equity Securities and Use of Proceeds			20

Item 3.			Defaults Upon Senior Securities			21

Item 4.			Mine Safety Disclosures			21

Item 5.			Other Information			21

Item 6.			Exhibits			21

Exhibit Index						22

Signatures						23

	Three Months Ended					Nine Months Ended
(in thousands, except per share data)	September 26, 2020			September 28, 2019		September 26, 2020		September 28, 2019
Net sales	$	300,620		$	253,796	$	791,532	$	751,762
Cost of goods sold		192,819			166,872		519,786		490,199
Gross profit		107,801			86,924		271,746		261,563
Selling, general and administrative expenses		63,028			59,961		184,288		177,637
Income from operations		44,773			26,963		87,458		83,926
Other (expense) income, net		(17	)		33		2,317		90
Income before income taxes		44,756			26,996		89,775		84,016
Provision for income taxes		10,497			5,688		18,856		17,803
Net income	$	34,259		$	21,308	$	70,919	$	66,213

Earnings per share:
Basic	$	1.06		$	0.66	$	2.19	$	2.03
Diluted	$	1.06		$	0.65	$	2.19	$	2.02
Weighted average shares outstanding:
Basic		32,281			32,522		32,317		32,656
Diluted		32,371			32,594		32,394		32,738

(in thousands, except for share data)	September 26, 2020		December 28, 2019
Assets
Current assets:
Cash and cash equivalents	$	170,502	$	68,353
Accounts receivable, less allowance for doubtful accounts of $1,202 and $957		405,312		391,810
Inventories		283,292		280,813
Prepaids and other current assets		11,769		13,614
Total current assets		870,875		754,590
Property, plant and equipment, net		94,217		101,837
Operating lease right-of-use assets		35,925		32,198
Goodwill		91,148		74,458
Intangible assets, net		26,054		21,305
Deferred tax asset, net		4,281		4,336
Other assets		36,333		52,348
Total assets	$	1,158,833	$	1,041,072
Liabilities and shareholders’ equity
Current liabilities:
Accounts payable	$	112,757	$	90,437
Accrued compensation		17,731		9,782
Accrued customer rebates and returns		130,592		105,903
Other accrued liabilities		18,320		14,380
Total current liabilities		279,400		220,502
Long-term operating lease liabilities		34,433		29,730
Other long-term liabilities		9,629		13,297
Deferred tax liabilities, net		4,006		3,959
Commitments and contingencies
Shareholders’ Equity:
Common stock, par value $0.01; authorized 50,000,000 shares; issued and outstanding 32,304,686 and 32,558,168 in 2020 and 2019, respectively		324		326
Additional paid-in capital		56,893		52,605
Retained earnings		774,148		720,653
Total shareholders’ equity		831,365		773,584
Total liabilities and shareholders' equity	$	1,158,833	$	1,041,072

	Three Months Ended September 26, 2020
	Common Stock						Additional
(in thousands, except share data)	Shares Issued			Par Value			Paid-In Capital			Retained Earnings			Total
Balance at June 27, 2020		32,440,413		$	326		$	55,406		$	751,400		$	807,132
Exercise of stock options		2,886			—			—			—			—
Compensation expense under Incentive Stock Plan		—			—			1,248			—			1,248
Purchase and cancellation of common stock		(135,787	)		(1	)		(244	)		(11,203	)		(11,448	)
Issuance of non-vested stock, net of cancellations		(2,937	)		(1	)		—			—			(1	)
Other stock related activity, net of tax		111			—			483			(308	)		175
Net income		—			—			—			34,259			34,259
Balance at September 26, 2020		32,304,686		$	324		$	56,893		$	774,148		$	831,365

	Three Months Ended September 28, 2019
	Common Stock						Additional
(in thousands, except share data)	Shares Issued			Par Value			Paid-In Capital			Retained Earnings			Total
Balance at June 29, 2019		32,781,331		$	328		$	51,514		$	698,490		$	750,332
Exercise of stock options		85			—			—			—			—
Compensation expense under Incentive Stock Plan		—			—			986			—			986
Purchase and cancellation of common stock		—			—			—			—			—
Issuance of non-vested stock, net of cancellations		6,593			—			—			—			—
Other stock related activity, net of tax		(456	)		—			51			(85	)		(34	)
Net income		—			—			—			21,308			21,308
Balance at September 28, 2019		32,787,553		$	328		$	52,551		$	719,713		$	772,592

	Nine Months Ended September 26, 2020
	Common Stock						Additional
(in thousands, except share data)	Shares Issued			Par Value			Paid-In Capital			Retained Earnings			Total
Balance at December 28, 2019		32,556,263		$	326		$	52,605		$	720,653		$	773,584
Exercise of stock options		2,896			—			—		—				—
Compensation expense under Incentive Stock Plan		—			—			3,966		—				3,966
Purchase and cancellation of common stock		(234,116	)		(2	)		(421	)		(16,890	)		(17,313	)
Issuance of non-vested stock, net of cancellations		(14,782	)		—			504		—				504
Other stock related activity, net of tax		(5,575	)		—			239			(534	)		(295	)
Net income		—			—			—			70,919			70,919
Balance at September 26, 2020		32,304,686		$	324		$	56,893		$	774,148		$	831,365

	Nine Months Ended September 28, 2019
	Common Stock						Additional
(in thousands, except share data)	Shares Issued			Par Value			Paid-In Capital			Retained Earnings			Total
Balance at December 29, 2018		33,004,861		$	330		$	47,861		$	679,432		$	727,623
Exercise of stock options		11,995			—			31			—			31
Compensation expense under Incentive Stock Plan		—			—			3,033			—			3,033
Purchase and cancellation of common stock		(290,274	)		(3	)		(522	)		(23,814	)		(24,339	)
Issuance of non-vested stock, net of cancellations		70,885			1			867			—			868
Other stock related activity, net of tax		(9,914	)		—			1,281			(2,118	)		(837	)
Net income		—			—			—			66,213			66,213
Balance at September 28, 2019		32,787,553		$	328		$	52,551		$	719,713		$	772,592

	Nine Months Ended
(in thousands)	September 26, 2020			September 28, 2019
Cash Flows from Operating Activities:
Net income	$	70,919		$	66,213
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation, amortization and accretion		22,544			21,011
Gain on equity method investment		(2,498	)		—
Provision for doubtful accounts		197			33
Benefit for deferred income taxes		(1,154	)		(302	)
Provision for stock-based compensation		4,069			3,033
Changes in assets and liabilities:
Accounts receivable		(11,685	)		28,276
Inventories		3,093			(12,231	)
Prepaids and other current assets		1,360			(10,174	)
Other assets		(1,923	)		1,976
Accounts payable		20,334			(28,444	)
Accrued customer rebates and returns		24,690			(8,312	)
Accrued compensation and other liabilities		15,773			(1,429	)
Cash provided by operating activities		145,719			59,650
Cash Flows from Investing Activities:
Acquisition, net of cash acquired		(14,308	)		—
Property, plant and equipment additions		(12,061	)		(24,656	)
Cash used in investing activities		(26,369	)		(24,656	)
Cash Flows from Financing Activities:
Proceeds of revolving credit line		99,000			—
Payments of revolving credit line		(99,000	)		—
Other stock related activity		112			57
Purchase and cancellation of common stock		(17,313	)		(24,339	)
Cash used in financing activities		(17,201	)		(24,282	)
Net Increase in Cash and Cash Equivalents		102,149			10,712
Cash and Cash Equivalents, Beginning of Period		68,353			43,458
Cash and Cash Equivalents, End of Period	$	170,502		$	54,170
Supplemental Cash Flow Information
Cash paid for interest expense	$	680		$	116
Cash paid for income taxes	$	19,575		$	28,454

(in thousands)	Valuation		Amortization Period (in years)
Customer relationships	$	4,600		15
Trade names		700		5
Technology		1,800		8
Other		190		5
Total	$	7,290

			September 26, 2020						December 28, 2019
Intangible assets subject to amortization	Weighted Average Amortization Period		Gross Carrying Value		Accumulated Amortization		Net Carrying Value		Gross Carrying Value		Accumulated Amortization		Net Carrying Value
(in thousands)
Trade names		10.8	$	6,760	$	1,432	$	5,328	$	6,060	$	975	$	5,085
Customer relationships		8.9		25,050		6,530		18,520		20,450		4,698		15,752
Technology		7.8		2,167		261		1,906		367		74		293
Other		3.6		430		130		300		240		65		175
Total			$	34,407	$	8,353	$	26,054	$	27,117	$	5,812	$	21,305

	Shares			Weighted Average Price
Balance at December 28, 2019		177,491		$	76.70
Granted		82,905		$	63.02
Vested		(25,314	)	$	70.89
Cancelled		(27,703	)	$	77.41
Balance at September 26, 2020		207,379		$	71.84

	Shares			Weighted Average Exercise Price		Weighted Average Remaining Term (In years)		Aggregate Intrinsic Value
Balance at December 28, 2019		181,712		$	70.78
Granted		109,352		$	63.25
Forfeited		(8,764	)	$	65.24
Exercised		(6,630	)	$	56.52
Balance at September 26, 2020		275,670		$	68.32		4.7	$	4,695,637
Options exercisable at September 26, 2020		99,017		$	65.99		2.2	$	1,917,351

	Three Months Ended*									Nine Months Ended*
(in millions)	September 26, 2020					September 28, 2019				September 26, 2020				September 28, 2019
Net sales	$	300.6		100.0	%	$	253.8	100.0	%	$	791.5	100.0	%	$	751.8	100.0	%
Cost of goods sold	$	192.8		64.1	%	$	166.9	65.8	%	$	519.8	65.7	%	$	490.2	65.2	%
Gross profit	$	107.8		35.9	%	$	86.9	34.2	%	$	271.7	34.3	%	$	261.6	34.8	%
Selling, general and administrative expenses	$	63.0		21.0	%	$	60.0	23.6	%	$	184.3	23.3	%	$	177.6	23.6	%
Income from operations	$	44.8		14.9	%	$	27.0	10.6	%	$	87.5	11.0	%	$	83.9	11.2	%
Other (expense) income, net	$	(0.0	)	0.0	%	$	0.0	0.0	%	$	2.3	0.3	%	$	0.1	0.0	%
Income before income taxes	$	44.8		14.9	%	$	27.0	10.6	%	$	89.8	11.3	%	$	84.0	11.2	%
Provision for income taxes	$	10.5		3.5	%	$	5.7	2.2	%	$	18.9	2.4	%	$	17.8	2.4	%
Net income	$	34.3		11.4	%	$	21.3	8.4	%	$	70.9	9.0	%	$	66.2	8.8	%

(in thousands)	September 26, 2020		December 28, 2019
Bulk product	$	131,622	$	114,308
Finished product		146,967		161,866
Packaging materials		4,703		4,639
Total	$	283,292	$	280,813

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (4)		Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs (4)
June 28, 2020 through July 25, 2020 (1)		1,208	$	63.56		—	$	138,465,024
July 26, 2020 through August 22, 2020 (2)		37,250	$	83.85		30,847	$	135,871,785
August 23, 2020 through September 26, 2020 (3)		98,042	$	84.73		96,010	$	127,738,974
Total		136,500				126,857	$	127,738,974


31.1		Certification of Chief Executive Officer pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. *

31.2		Certification of Chief Financial Officer pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. *

32		Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished with this report). **

101		The following financial statements from the Dorman Products, Inc. Quarterly Report on Form 10-Q as of and for the quarter ended September 26, 2020, formatted in Inline XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Statements of Operations; (ii) the Condensed Consolidated Balance Sheets; (iii) Condensed Consolidated Statements of Shareholders’ Equity; (iv) the Condensed Consolidated Statements of Cash Flows and (v) the Notes to Condensed Consolidated Financial Statements.

104		The cover page from the Company’s Quarterly Report on Form 10-Q as of and for the quarter ended September 26, 2020, formatted in Inline XBRL (included as Exhibit 101).