Dorman Products has announced its financial results for the first quarter ended March 31.
The company reported first quarter 2018 net sales of $227.3 million, up 3 percent compared to net sales of $221.6 million in the first quarter of 2017. Included in net sales were approximately $10 million of sales from MAS Automotive Distribution Inc. (MAS) which was acquired in October of 2017.
Net income for the first quarter of 2018 was $30.6 million, or 93 cents per diluted share compared to $29.2 million, or 85 per diluted share in the prior year quarter. Adjusted net income in the current year first quarter was $31.7 million, or 96 cents per diluted share, up 13 percent compared to $29.4 million or 85 cents per diluted share in the prior year quarter.
Dorman recorded income tax expense of $9.5 million in the first quarter, or 23.7 percent of income before income taxes down from $15.9 million, or 35.3 percent of income before income taxes recorded in the same quarter last year. The reduction in tax rate is primarily a result of the recently enacted U.S. tax legislation known as the Tax Cuts and Jobs Act.
Matt Barton, Dorman Products president and CEO, said, “Overall, year-over-year customer sell-through (our customers’ sales of Dorman product to end-users) was up mid-single digits in the quarter signaling steadying end-market conditions. However, we continued to feel customer inventory destocking pressure throughout the quarter. From an orders perspective, order rates accelerated in the latter half of the quarter with March posting the strongest order rates of the quarter. Also, we experienced a year-over-year sales decline for sales transacted over the internet, a result of brand protection pricing policy changes made in early fourth quarter of last year.
“Despite these short-term headwinds, our business fundamentals remain strong. We launched 1,600 new SKUs in the quarter, a 24 percent increase over last year and our Dorman Heavy Duty Solutions lines experienced solid growth of 31 percent in the quarter. The introduction of two new industry-leading programs – air suspension systems and loaded steering knuckles contributed to the growth of new SKUs. The integration of MAS continues to go well and is on plan. In April, we combined our Dorman and the newly acquired MAS chassis programs with the introduction of the most comprehensive chassis offering in today’s aftermarket. The program includes Dorman Premium Chassis for extended life maintenance-free driving, Premium RD, extreme-duty parts for fleets and our MAS line for value conscious customers. We are extremely excited about the sales opportunity this presents Dorman Products and our valued channel partners.”
The company re-iterated that its full-year sales growth is estimated to be in the 6 to 9 percent range for 2018, which includes the net sales contribution from MAS. Fiscal 2018 EPS on a GAAP basis is expected to be in the $4 to $4.23 range. Fiscal 2018 Adjusted EPS is expected to be in the $4.10 to $4.32 range or a 22 percent to 28 percent growth rate.
Under its share repurchase program, Dorman repurchased 128.9 thousand shares of its common stock for $9 million at an average share price of $69.84 during the first quarter ended March 31, 2018. The company has $67.7 million left under its current share repurchase authorization.