COLMAR, Pa. – Dorman Products announced sales for the fourth quarter ended Dec. 27, 2014, of $174 million, an increase of 2 percent from $169.8 million in the fourth quarter of 2013. The sales growth rate in the fourth quarter would have been 9 percent when adjusted for previously announced pre-enterprise resource planning (ERP) system conversion stock-up orders that were shipped in the third quarter. Diluted earnings per share for the fourth quarter ended Dec. 27, 2014, decreased 7 percent to 52 cents per share from 56 cents per share in 2013.
Results for the fourth quarter of 2014 include $5.9 million in incremental costs associated with the ERP conversion, consisting of $2.8 million in increased distribution costs, $1.9 million in consulting and other related support costs, $0.5 million in additional depreciation and $0.7 million in other costs. Approximately 90 percent of these costs impacted selling, general and administrative expenses (SG&A) while the remaining 10 percent impacted gross profit. Excluding the impact of these items, diluted earnings per share would have increased 13 percent to 63 cents from 56 cents last year.
“The sales growth rate in the second half of 2014 was negatively impacted by softer order patterns from two customers that chose to reduce inventory levels. Growth rates for the rest of the business were in the low teens, which were down slightly from historical levels. Additionally, sell-through rates of our products were strong in the fourth quarter, but down slightly from third quarter levels,” said Steven Berman, chairman and CEO.
For the fiscal year ended December 27, 2014, sales increased 13 percent over the prior year to $751.5 million from $664.5 million last year. Diluted earnings per share in 2014 rose 11 percent to $2.49 from $2.24 in the prior year.
“I would like to thank all of our contributors for their commitment and dedication in a year that brought forth many challenges, and our customers and end-users for their continued support and acceptance of our new products. This year marked our 14th consecutive year of sales growth, including double-digit sales growth in each of the past six years. Our organic sales growth continues to be driven by new products as a result of our continued commitment to our ‘New to the Aftermarket’ strategy,” said Berman. “The first half of 2015 will be challenging given the 20 percent growth rates experienced in the first half of 2014 and additional costs to be incurred as we work to complete the stabilization and transition phase of the conversion to our new ERP system. While we don’t expect incremental costs from the ERP implementation to be as high as they were in the fourth quarter, they will be meaningful through at least mid-year. We continue to believe that benefits from our investments in the business and the continued success of our new products will allow us to achieve our long-term goals of low double digit sales and earnings growth.”
The company repurchased 855,600 shares of its common stock for $40.4 million at an average price of $47.20 per share during fiscal 2014, and has $59.6 million remaining under its current $100 million share repurchase program.
