COLMAR, Pa. — Dorman Products has announced financial results for the fourth quarter ended Dec. 27, 2008.
Sales decreased 4.5 percent to $80.7 million for the three months ended Dec. 27, 2008 from $84.5 million last year. The company said the revenue drop was the result of a decline in demand across most of its product lines.
Reported net income in the fourth quarter of 2008 was $4.9 million compared to net income of $3.7 million in the same period last year. Reported diluted earnings per share in the fourth quarter of 2008 were 27 cents compared to 20 cents in the same period last year. Excluding the impact of the one-time items shown in the reconciliation of non-GAAP measures below, net income in the fourth quarter of 2008 was $4.2 million compared to net income of $4.4 million in the same period last year and diluted EPS in the fourth quarter of 2008 decreased to 23 cents from 24 cents in the same period last year.
Despite softness in the U.S. economy, revenues for the 12 months ended Dec. 27, 2008 were up 4.5 percent to $342.3 million from $327.7 million last year. Revenue growth resulted from higher new product sales and further penetration of existing automotive lines.
Reported net income for the 12 months ended Dec. 27, 2008 was $17.8 million compared to net income of $19.2 million in the same period last year. Reported diluted earnings per share for the year were 99 cents compared to $1.06 in the same period last year. Excluding the impact of the one-time items, net income in 2008 was $17.1 million compared to net income of $19.1 million in the same period last year and diluted EPS in 2008 decreased to 95 cents from $1.05 in the same period last year.
For the year, gross profit margin was 32.2 percent compared to 34.3 percent in the prior year. The company said this decrease is primarily the result of strategic investments to grow market share and higher material and shipping costs.
Selling, general and administrative expenses in 2008 increased 4.7 percent to $81.8 million from $78.1 million in 2007. The increase is the result of higher variable costs related to sales growth and increased staffing levels in product development, engineering and quality control. These increases were partially offset by incentive compensation expense which was $1.8 million lower in 2008 than in the prior year due to lower earnings levels. Results for 2007 also include a $1.4 million reduction in vacation expense due to the vacation policy change mentioned above.
Interest expense, net, decreased to $0.9 million in 2008 from $1.9 million in 2007 due to lower borrowing levels and interest rates.
The company’s effective tax rate decreased to 35.2 percent from 40.2 percent in the prior year. The decrease is primarily the result of a $0.7 million tax benefit realized upon the disposition of Dorman’s Canadian subsidiary.
Richard Berman, chairman and chief executive officer, said, "Our OE Solutions product lines continued to grow at double digit rates in the fourth quarter while most other lines declined due to softened demand. Our customers and end users continue to support our new products despite the weak economy. The strength of our balance sheet affords us the opportunity to make investments in new product development so that we can continue to enhance our leadership position in the aftermarket with innovative new products and solutions for our customers and end users."
