Dorman Products, Inc. Reports First Quarter 2025 Results

Rhea-AI Summary

Dorman Products (NASDAQ: DORM) reported strong Q1 2025 financial results with net sales of $507.7 million, up 8.3% from $468.7 million in Q1 2024. The company's diluted EPS increased 78% to $1.87, while adjusted diluted EPS rose 54% to $2.02. The Light Duty segment showed impressive growth with a 14% increase in sales, though Heavy Duty and Specialty Vehicle segments declined. The company generated $51 million in operating cash flow, repaid $20 million in debt, and repurchased $12 million in shares.

Dorman reaffirmed its 2025 guidance, projecting 3-5% net sales growth and adjusted diluted EPS of $7.55-$7.85. The guidance excludes impacts from tariffs, potential acquisitions, supply chain disruptions, and share repurchases.

Positive

• Net sales increased 8.3% to $507.7 million in Q1 2025
• Diluted EPS grew 78% to $1.87, with adjusted diluted EPS up 54% to $2.02
• Light Duty segment sales grew 14% with margin improvement of 380 basis points
• Gross profit margin improved to 40.9% from 38.7% year-over-year
• Generated $51 million in operating cash flow and reduced debt by $20 million

Negative

• Heavy Duty segment sales declined 11% with negative profit margin
• Specialty Vehicle segment sales decreased 9% with 370 basis points margin decline
• Expected significant impact from recently enacted tariffs on operations
• Interest expense remains substantial at $7.4 million despite reduction from prior year

Insights

Financial Analyst

Dorman delivers exceptional Q1 with 8.3% revenue growth, 78% EPS surge, and impressive margin expansion despite segment challenges.

Dorman's Q1 results showcase remarkable financial execution with revenue of $507.7 million (up 8.3%) and diluted EPS of $1.87 (up 78%). What truly stands out is the dual expansion of profitability metrics - gross margin improved 220 basis points to 40.9% while SG&A expense ratio decreased 200 basis points to 25.1%. This operational leverage fueled the outsized earnings growth that substantially outpaced revenue gains.

The Light Duty segment delivered stellar results with 14% growth and 380 basis point margin improvement to 19.9%. However, this strength was partially offset by concerning performance in smaller segments: Heavy Duty declined 11% with negative margins and Specialty Vehicle fell 9% with 370 basis point margin compression.

Cash flow generation remains robust with $51 million from operations, enabling balanced capital allocation between $20 million in debt reduction and $12 million in share repurchases. The company's ability to maintain its full-year guidance excluding tariff impacts demonstrates confidence in underlying business momentum despite external uncertainties.

The guidance for 3-5% revenue growth and 14-19% EPS growth for full-year 2025 suggests continued operational improvements, though tariff impacts remain the key variable not factored into projections. The company's preparations through supply chain diversification and balance sheet strengthening position it well to navigate potential headwinds.

Automotive Aftermarket Specialist

Dorman's strong Light Duty performance offsets segment weaknesses while the company prepares for potential tariff disruptions.

Dorman's Q1 performance reveals significant divergence across market segments that mirrors broader aftermarket trends. The 14% Light Duty growth likely reflects the aging U.S. vehicle fleet (now averaging over 12 years old), which drives sustained demand for replacement parts. This segment's 380 basis point margin expansion indicates Dorman has effectively leveraged its innovation capabilities and brand strength to enhance pricing power while managing costs.

The concerning performance in Heavy Duty (down 11%) and Specialty Vehicle (down 9%) segments aligns with cyclical weakness in commercial transportation markets. Heavy Duty's slight negative profit margin suggests potential structural challenges that management must address to prevent further deterioration.

Management's emphasis on tariff preparedness through supply chain diversification reflects industry-wide concerns about trade policy impacts. The aftermarket segment typically benefits from vehicle aging cycles but remains vulnerable to supply chain disruptions and cost pressures. Dorman's references to "deep relationships with suppliers and customers" suggests the company has built strategic redundancies that could prove valuable if tariff-related disruptions intensify.

The company's ability to maintain guidance excluding tariffs demonstrates confidence in the underlying demand environment while acknowledging the significant external variable of trade policy. Dorman's continued investment in innovation alongside operational discipline positions it effectively within the evolving aftermarket landscape, though external policy factors remain the primary uncertainty for 2025 performance.

Highlights (All comparisons are to the prior year period unless otherwise noted):

• Net sales of $507.7 million for the quarter, up 8.3% compared to $468.7 million
• Diluted earnings per share (“EPS”) of $1.87, up 78% compared to $1.05
• Adjusted diluted EPS* of $2.02, up 54% compared to $1.31
• Generated $51 million of cash from operating activities; repaid $20 million of debt and repurchased $12 million of its shares
• Reaffirms its full-year guidance for 2025, excluding tariffs
  

COLMAR, Pa., May 05, 2025 (GLOBE NEWSWIRE) -- Dorman Products, Inc. (the “Company” or “Dorman”) (NASDAQ: DORM), a leading supplier in the motor vehicle aftermarket industry, today announced its financial results for the first quarter ended March 29, 2025.

Kevin Olsen, Dorman’s President and Chief Executive Officer, stated, “We started the year with outstanding performance, including solid top- and bottom-line growth in the first quarter. Total net sales increased 8.3%, driven by strong customer demand in our Light Duty segment. This top-line growth, along with our continuing operational excellence initiatives, drove an impressive 78% increase in diluted EPS and a 54% increase in adjusted diluted EPS*. These results further support our outlook for continued growth in our underlying business in 2025.

“While the recently enacted tariffs are expected to have a significant impact on the entire motor vehicle aftermarket and its global supply chain, we believe we are well-positioned to deliver for our customers and end-users. Over the last several years, we have diversified our supply chain, built deep relationships with our suppliers and customers, invested in innovation and strong brands, and strengthened our balance sheet and liquidity position. These actions have built resiliency within our business, and we believe we have the experience and talent to navigate the economic challenges ahead.

First Quarter Financial Results
The Company reported first quarter 2025 net sales of $507.7 million, up 8.3% compared to net sales of $468.7 million in the first quarter of 2024.

Gross profit was $207.7 million in the first quarter of 2025, or 40.9% of net sales, compared to $181.4 million, or 38.7% of net sales, in the same quarter last year.

Selling, general and administrative (“SG&A”) expenses were $127.6 million, or 25.1% of net sales, in the first quarter of 2025 compared to $127.0 million, or 27.1% of net sales, in the same quarter last year. Adjusted SG&A expenses* were $121.6 million, or 23.9% of net sales, in the first quarter of 2025, compared to $116.5 million, or 24.9% of net sales, in the same quarter last year.

Diluted EPS was $1.87 in the first quarter of 2025, up 78% compared to diluted EPS of $1.05 in the same quarter last year. Adjusted diluted EPS* was $2.02 in the first quarter of 2025, up 54% compared to adjusted diluted EPS* of $1.31 in the same quarter last year.

Segment results were as follows:

	Net Sales									Segment Profit Margin
($ in millions)	Q1 2025			Q1 2024			Change			Q1 2025			Q1 2024			Change
Light Duty	$	408.8		$	359.3		14	%		19.9	%		16.1	%		380 bps
Heavy Duty	$	51.7		$	57.8		-11	%		-0.3	%		0.0	%		-30 bps
Specialty Vehicle	$	47.2		$	51.6		-9	%		10.2	%		13.9	%		-370 bps

2025 Guidance

The Company reaffirms its full-year 2025 guidance as detailed in the table below, which excludes any impact from U.S. tariffs enacted or proposed in 2025 or potential retaliatory measures from U.S. trade partners. Additionally, our guidance excludes any potential impacts from future acquisitions and divestitures, supply chain disruptions, significant inflation, interest rate changes, and share repurchases.

	2025 Guidance
Net Sales Growth vs. 2024	3% – 5%
Diluted EPS	$7.00 – $7.30
Growth vs. 2024	14% – 19%
Adjusted Diluted EPS*	$7.55 – $7.85
Growth vs. 2024	6% – 10%
Tax Rate Estimate	24	%

Conference Call and Webcast
The Company will hold a conference call and webcast for investors on Tuesday, May 6, 2025, beginning at 8:00 a.m. Eastern time. The conference call can be accessed by telephone at (888) 440-4182 within the U.S. or +1 (646) 960-0653 outside the U.S. When prompted, enter the conference ID number 1698878. A live audio webcast and accompanying presentation materials can be accessed on the Company’s website at Dorman Products, Inc. - Events. After the call, a replay of the session will be available on the Investor section of the Company’s website.

About Dorman Products
Dorman gives professionals, enthusiasts, and owners greater freedom to fix motor vehicles. For over 100 years, we have been driving new solutions, releasing tens of thousands of aftermarket replacement products engineered to save time and money and increase convenience and reliability.

Founded and headquartered in the United States, we are a pioneering global organization offering an always-evolving catalog of products covering cars, trucks, and specialty vehicles, from chassis to body, from underhood to undercarriage, and from hardware to complex electronics.

*Non-GAAP Measures
In addition to the financial measures prepared in accordance with generally accepted accounting principles (GAAP), this earnings release also contains Non-GAAP financial measures. The reasons why we believe these measures provide useful information to investors and a reconciliation of these measures to the most directly comparable GAAP measures and other information relating to these Non-GAAP measures are included in the supplemental schedules attached.

Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “may,” “will,” “should,” “likely,” “probably,” “anticipates,” “expects,” “intends,” “plans,” “projects,” “believes,” “views,” “estimates” and similar expressions are used to identify these forward-looking statements. Readers are cautioned not to place undue reliance on those forward-looking statements, which speak only as of the date such statements were made. Such forward-looking statements are based on current expectations that involve known and unknown risks, uncertainties, and other factors (many of which are outside of our control). Such risks, uncertainties and other factors relate to, among other things: competition in and the evolution of the motor vehicle aftermarket industry; changes in our relationships with, or the loss of, any customers or suppliers; our ability to develop, market and sell new and existing products; our ability to anticipate and meet customer demand; our ability to purchase necessary materials from our suppliers and the impacts of any related logistics constraints; widespread public health pandemics; political and regulatory matters, such as changes in trade policy, the imposition of tariffs and climate regulation; our ability to protect our information security systems and defend against cyberattacks; our ability to protect our intellectual property and defend against any claims of infringement; and financial and economic factors, such as our level of indebtedness, fluctuations in interest rates and inflation. More information on these risks and other potential factors that could affect the Company’s business, reputation, results of operations, financial condition, and stock price is included in the Company’s filings with the Securities and Exchange Commission (“SEC”), including in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s most recently filed periodic reports on Form 10-K and Form 10-Q and subsequent filings. The Company is under no obligation to, and expressly disclaims any such obligation to, update any of the information in this document, including but not limited to any situation where any forward-looking statement later turns out to be inaccurate, whether as a result of new information, future events, or otherwise.

Investor Relations Contact
Alex Whitelam, VP, Investor Relations
awhitelam@dormanproducts.com 
(445) 448-9522

Visit our website at www.dormanproducts.com. The Investor Relations section of the website contains a significant amount of information about Dorman, including financial and other information for investors. Dorman encourages investors to visit its website periodically to view new and updated information.

DORMAN PRODUCTS, INC.
Consolidated Statements of Operations
(in thousands, except per-share amounts)
	Three Months Ended							Three Months Ended
(unaudited)	3/29/25				Pct.*			3/30/24			Pct. *
Net sales	$	507,692			100.0			$	468,701		100.0
Cost of goods sold		299,984			59.1				287,255		61.3
Gross profit		207,708			40.9				181,446		38.7
Selling, general, and administrative expenses		127,634			25.1				127,008		27.1
Income from operations		80,074			15.8				54,438		11.6
Interest expense, net		7,358			1.4				10,605		2.3
Other (income) expense, net		(1,361	)		(0.3	)			40		0.0
Income before income taxes		74,077			14.6				43,793		9.3
Provision for income taxes		16,572			3.3				10,965		2.3
Net income	$	57,505			11.3			$	32,828		7.0
Diluted earnings per share	$	1.87						$	1.05
Weighted average diluted shares outstanding		30,810							31,250

^{* Percentage of sales. Data may not add due to rounding.}

DORMAN PRODUCTS, INC.
Consolidated Balance Sheets
(in thousands, except share data)
(unaudited)	3/29/25				12/31/24
Assets
Current assets:
Cash and cash equivalents	$	60,612			$	57,137
Accounts receivable, less allowance for doubtful accounts of $1,913 and $1,619		555,077				573,787
Inventories		734,575				707,977
Prepaids and other current assets		25,728				30,859
Total current assets	$	1,375,992			$	1,369,760
Property, plant, and equipment, net		167,062				164,499
Operating lease right-of-use assets		115,373				118,499
Goodwill		443,153				442,886
Intangible assets, net		272,811				278,213
Deferred tax assets		5,836				5,786
Other assets		47,524				44,878
Total assets	$	2,427,751			$	2,424,521
Liabilities and shareholders’ equity
Current liabilities:
Accounts payable	$	221,030			$	231,814
Accrued compensation		21,185				44,002
Accrued customer rebates and returns		203,386				204,355
Revolving credit facility		—				13,960
Current portion of long-term debt		21,875				28,125
Other accrued liabilities		58,694				41,546
Total current liabilities		526,170				563,802
Long-term debt		439,613				439,513
Long-term operating lease liabilities		101,451				105,142
Deferred tax liabilities, net		3,710				3,700
Other long-term liabilities		19,403				18,894
Commitments and contingencies
Shareholders’ equity:
Common stock, $0.01 par value; 50,000,000 shares authorized; 30,539,334 and 30,565,855 shares issued and outstanding in 2025 and 2024, respectively		306				306
Additional paid-in capital		117,190				119,077
Retained earnings		1,226,461				1,180,862
Accumulated other comprehensive loss		(6,553	)			(6,775	)
Total shareholders’ equity		1,337,404				1,293,470
Total liabilities and shareholders' equity	$	2,427,751			$	2,424,521

Selected Cash Flow Information (unaudited):

	Three Months Ended
(in thousands)	3/29/25			3/30/24
Cash provided by operating activities	$	51,237		$	51,980
Depreciation, amortization and accretion	$	13,843		$	13,851
Capital expenditures	$	10,985		$	10,755

DORMAN PRODUCTS, INC.
Non-GAAP Financial Measures
(in thousands, except per-share amounts)

Our financial results include certain financial measures not derived in accordance with generally accepted accounting principles (GAAP). Non-GAAP financial measures should not be used as a substitute for GAAP measures, or considered in isolation, for the purpose of analyzing our operating performance, financial position or cash flows. Additionally, these non-GAAP measures may not be comparable to similarly titled measures reported by other companies. However, we have presented these non-GAAP financial measures because we believe this presentation, when reconciled to the corresponding GAAP measure, provides useful information to investors by offering additional ways of viewing our results, profitability trends, and underlying growth relative to prior and future periods and to our peers. Management uses these non-GAAP financial measures in making financial, operating, and planning decisions and in evaluating our performance. Non-GAAP financial measures may reflect adjustments for charges such as fair value adjustments, amortization, transaction costs, severance, accelerated depreciation, and other similar expenses related to acquisitions as well as other items that we believe are not related to our ongoing performance.

Adjusted Net Income:

	Three Months Ended
(unaudited)	3/29/25*				3/30/24*
Net income (GAAP)	$	57,505			$	32,828
Pretax acquisition-related intangible assets amortization [1]		5,471				5,484
Pretax acquisition-related transaction and other costs [2]		492				483
Pretax reduction in workforce costs [3]		114				4,568
Tax adjustment (related to above items) [4]		(1,474	)			(2,517	)
Adjusted net income (Non-GAAP)	$	62,108			$	40,846
Diluted earnings per share (GAAP)	$	1.87			$	1.05
Pretax acquisition-related intangible assets amortization [1]		0.18				0.18
Pretax acquisition-related transaction and other costs [2]		0.02				0.02
Pretax reduction in workforce costs [3]		0.00				0.15
Tax adjustment (related to above items) [4]		(0.05	)			(0.08	)
Adjusted diluted earnings per share (Non-GAAP)	$	2.02			$	1.31
Weighted average diluted shares outstanding		30,810				31,250

^{* Amounts may not add due to rounding.
See accompanying notes at the end of this supplemental schedule.}

Adjusted Gross Profit:

	Three Months Ended					Three Months Ended
(unaudited)	3/29/25			Pct.**		3/30/24			Pct.**
Gross profit (GAAP)	$	207,708		40.9		$	181,446		38.7
Pretax acquisition-related transaction and other costs [2]		—		—			8		0.0
Adjusted gross profit (Non-GAAP)	$	207,708		40.9		$	181,454		38.7
Net sales	$	507,692				$	468,701

Adjusted SG&A Expenses:

	Three Months Ended							Three Months Ended
(unaudited)	3/29/25				Pct.**			3/30/24				Pct.**
SG&A expenses (GAAP)	$	127,634			25.1			$	127,008			27.1
Pretax acquisition-related intangible assets amortization [1]		(5,471	)		(1.1	)			(5,484	)		(1.2	)
Pretax acquisition-related transaction and other costs [2]		(492	)		(0.1	)			(475	)		(0.1	)
Pretax reduction in workforce costs [3]		(114	)		(0.0	)			(4,568	)		(1.0	)
Adjusted SG&A expenses (Non-GAAP)	$	121,557			23.9			$	116,481			24.9
Net sales	$	507,692						$	468,701

^{** Percentage of sales. Data may not add due to rounding.}

[1] – Pretax acquisition-related intangible asset amortization results from allocating the purchase price of acquisitions to the acquired tangible and intangible assets of the acquired business and recognizing the cost of the intangible asset over the period of benefit. Such costs were $5.5 million pretax (or $4.1 million after tax) during both the three months ended March 29, 2025 and March 30, 2024.

[2] – Pretax acquisition-related transaction and other costs include costs incurred to complete and integrate acquisitions. During the three months ended March 29, 2025, we incurred charges included in selling, general and administrative expenses to complete and integrate acquisitions of $0.5 million pretax (or $0.4 million after tax).

During the three months ended March 30, 2024, we incurred charges included in cost of goods sold for integration costs of $0.0 million pretax (or $0.0 million after tax). During the three months ended March 30, 2024, we incurred charges included in selling, general and administrative expenses to complete and integrate acquisitions of $0.5 million pretax (or $0.4 million after tax).

[3] – Pretax reduction in workforce costs represents costs incurred in connection with our planned workforce reduction including severance and other payroll-related costs, insurance continuation costs, modifications of share-based compensation awards, and other costs directly attributable to the action. During the three months ended March 29, 2025 and March 30, 2024, the expenses were $0.1 million pretax (or $0.1 million after tax) and $4.6 million pretax (or $3.5 million after tax), respectively.

[4] – Tax adjustments represent the aggregate tax effect of all non-GAAP adjustments reflected in the table above and totaled $(1.5) million during the three months ended March 29, 2025, and $(2.5) million during the three months ended March 30, 2024. Such items are estimated by applying our statutory tax rate to the pretax amount, or an actual tax amount for discrete items.

2025 Guidance:

The Company provides the following guidance ranges related to their fiscal 2025 outlook:

	Year Ending 12/31/2025
(unaudited)	Low End*				High End*
Diluted earnings per share (GAAP)	$	7.00			$	7.30
Pretax acquisition-related intangible assets amortization		0.69				0.69
Pretax acquisition transaction and other costs		0.03				0.03
Tax adjustment (related to above items)		(0.17	)			(0.17	)
Adjusted diluted earnings per share (Non-GAAP)	$	7.55			$	7.85
Weighted average diluted shares outstanding		30,800				30,800

^{*Data may not add due to rounding.}

FAQ

What were Dorman Products' (DORM) Q1 2025 earnings results?

Dorman reported Q1 2025 net sales of $507.7 million (up 8.3%) and diluted EPS of $1.87 (up 78%). Adjusted diluted EPS was $2.02, increasing 54% from the previous year.

What is Dorman Products' (DORM) guidance for 2025?

Dorman expects 3-5% net sales growth and adjusted diluted EPS of $7.55-$7.85, representing 6-10% growth, with a projected tax rate of 24%.

How did Dorman's (DORM) different segments perform in Q1 2025?

Light Duty segment sales grew 14% with improved margins, while Heavy Duty declined 11% and Specialty Vehicle decreased 9% with margin deterioration.

What was Dorman Products' (DORM) cash flow and debt management in Q1 2025?

The company generated $51 million in operating cash flow, repaid $20 million of debt, and repurchased $12 million of shares during Q1 2025.

How will tariffs impact Dorman Products (DORM) in 2025?

The company expects recently enacted tariffs to significantly impact the entire motor vehicle aftermarket and global supply chain, though specific impacts are excluded from current guidance.