Dorman Products Inc. has announced record sales and EPS for the fourth quarter and full-year ended Dec. 31, 2016.
Net sales for the 14 week fourth quarter increased $24.3 million, or 12 percent, compared to $229.1 million from $204.8 million for the 13 week fourth quarter ended 2015. Net sales growth, adjusted for the additional week, was approximately 7 percent. Gross profit for the fourth quarter increased 18 percent to $92.2 million (or 40.2 percent of sales) from $77.8 million (or 38 percent of sales) in the fourth quarter of 2015.
Diluted Earnings Per Share for the fourth quarter increased 34 percent to 83 cents per share from 62 cents per share in the fourth quarter of 2015. EPS growth, adjusted for the additional week, was approximately 24 percent.
In its earnings release, Dorman noted, “As expected, the unfavorable stocking order comparisons we experienced in the third quarter reversed, and sales growth returned to much stronger levels in the fourth quarter aided by an extra shipping week in 2016. Gross margin expansion was primarily driven by a more favorable sales mix, a result of exiting some underperforming, low margin product lines last year in the fourth quarter, lower excess and obsolete provisions as we continue to reduce inventory levels while improving the quality of inventory on hand and, to a lesser extent, leverage on the higher sales volumes. SG&A Expenses, adjusted for a $3 million pre-tax bad debt provision taken in the fourth quarter of 2015, grew 12 percent. The extra week, continued investment in new product development and volume growth were the primary drivers of the SG&A expense growth.”
Under its share repurchase program, Dorman repurchased 101.2 thousand shares of its common stock during the fourth quarter at an average share price of $63.04.
Full Year 2016 Financial Results
Net sales for the 53-week fiscal year ended Dec. 31, 2016, increased $56.6 million, or 7 percent, compared to $859.6 million from $803 million for the 52-week fiscal year ended Dec. 25, 2016. Diluted Earnings Per Share for fiscal 2016 increased 18 percent to $3.07 per share from $2.60 per share in fiscal 2015.
Under its share repurchase program, Dorman repurchased 430.9 thousand shares of its common stock during fiscal 2016 at an average share price of $52.15.
“We are pleased to announce another successful year highlighted by record sales and earnings,” said Matt Barton, president and CEO. “Our success is directly attributable to the tireless efforts of our contributors who continue to execute our proven ‘New to the Aftermarket’ product development strategy while ensuring high levels of service to our customers and end-users. I would like to thank all our contributors who continue to drive Dorman to new levels of performance.
“Our core mission continues to be identifying failure prone passenger car, light truck and heavy-duty truck parts that are only available from dealerships and make a high-quality alternative available to our customers and end users. To that end, we continue to invest in our new product capabilities allowing us to deliver growth well in excess of industry growth levels. During 2016, we introduced 4,220 new parts, including 1,255 ‘Formerly Dealer Only’ parts. Sales from new product launched in the last 24 months as a percentage of total sales was 17 percent, and we remain confident that we can continue to deliver above average industry growth over the long-term by remaining laser-focused on this ‘New to the Aftermarket’ mission. As a result, our previously issued guidance for 2017 remains unchanged as we continue to expect mid- to high-single-digit organic revenue and net income growth,” said Barton.
