Dorman Products, Inc. Stock Price: Quote, Forecast, Splits & News (DORM)

Perplexity Finance

DORM

Dorman Products, Inc.

DORM

Overview

Financials

Historical Data

$124.71

+$0.16

0.13%

At close: Jun 16, 4:00:01 PM EDT

$124.71

$0.00

After hours: 4:33:47 PM EDT

Change

+$0.16

0.13%

Financial Profile

Prev Close

$124.55

Market Cap

$3.81B

Day Range

$124.02 - $127.29

Open

$125.13

P/E Ratio

17.9

52W Range

$87.05 - $146.60

24H Volume

$24.51M

Dividend Yield

0.00%

EPS

6.96

Key Issues

Recent Transcripts

Q1 2025 delivered strong 8% sales growth, margin expansion, and 54% EPS increase.

Dorman achieved record $2B+ sales, strong margins, and robust cash flow in 2024.

Financial information provided by Financial Modeling Prep. Options data provided by Unusual Whales. Live transcripts provided by Quartr. Reported revenue and EPS data from Earnings powered by FinChat.io. All data is provided for informational purposes only, and is not intended for trading purposes or financial, investment, tax, legal, accounting or other advice.

Market Cap: $3.8B
IPO Date: 3/12/91
CEO: Kevin M. Olsen
Fulltime Employees: 3.8K
Sector: Consumer Cyclical
Industry: Auto - Parts
Country: US
Exchange: NASDAQ Global Select

Peers

$0.00

Watchlist

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Dorman Products, Inc. Stock Price: Quote, Forecast, Splits & News (DORM)

Perplexity Finance

DORM

Dorman Products, Inc.

DORM

Overview

Financials

Historical Data

$124.71

+$0.16

0.13%

At close: Jun 16, 4:00:01 PM EDT

$124.71

$0.00

After hours: 4:33:47 PM EDT

Change

+$0.16

0.13%

Financial Profile

Prev Close

$124.55

Market Cap

$3.81B

Day Range

$124.02 - $127.29

Open

$125.13

P/E Ratio

17.9

52W Range

$87.05 - $146.60

24H Volume

$24.51M

Dividend Yield

0.00%

EPS

6.96

Key Issues

Earnings

Report Date

May 5, 2025

Reported Revenue

507.7M

Miss -3.3%

Avg 1d Change

6.65%

Report Period

Q1 2025

Reported EPS

Beat +36.49%

Implied Move 1d

6.07%

Transcript

10m 23s

Good morning, everyone. Welcome to Dorman's first quarter twenty twenty five earnings conference call. I'm joined by Kevin Olson, Dorman's Chief Executive Officer and David Hession, Dorman's Chief Financial Officer. Kevin will share updates on the business and address the tariff situation. Then David will review our quarterly results and reaffirm guidance. Kevin will then close our prepared remarks before opening the call for questions. By now, everyone should have access to our earnings release and earnings call presentation, which are available on the Investor Relations portion of our website at doormanproducts.com. Before we begin, I'd like to remind everyone that our prepared remarks earnings release and investor presentation, including forward looking statements within the meeting of federal securities laws. We advise listeners to review the risk factors and statements in our most recent 10 Q 10 ks and earnings release for important material assumptions expectations, and factors that may cause actual results to differ materially from those anticipated and described in such forward looking statements. We'll also reference certain non GAAP measures. Reconciliations of these non GAAP measures to the most directly comparable GAAP measures are contained in the schedules attached to our earnings release. And in the appendix to this earnings call presentation both of which can be found on the Investor Relations section of Dorman's website.

11m 39s

Finally, during the Q and A portion of today's call, we ask that participants limit themselves to one question with one follow-up and to rejoin the queue if they have additional questions. And with that, I'll turn the call over to Kevin. Thanks, Alex. Good morning, and thank you for joining our first quarter twenty twenty five earnings call. As Alex mentioned, I'll start with a high level review of the results and then cover the actions we've taken over the last several years to position us well to address tariffs. I'll also touch on the observations we're seeing within each of our segments. Turning to Slide three, I wanted to briefly touch on the quarter. David will provide more detail. We had an outstanding first quarter. With strong top and bottom line results. Consolidated net sales for the quarter grew 8% year over year to $5.00 $8,000,000 Our team continues to do a great job on the new product development front which contributed to our growth. We also delivered solid margin expansion in the quarter. Adjusted operating margin for Q1 twenty twenty five was 17%, expanding three ten basis points compared to the same period last year. This margin performance was again led by our light duty business.

12m 55s

Which drove solid margin improvement over last year's first quarter. Lastly, adjusted diluted EPS increased over last year's first quarter by an impressive 54% to $2.2 and free cash flow in the quarter was $40,000,000 allowing us to repay $20,000,000 of debt and repurchase $12,000,000 of our common stock. Overall, we began the year with strong results. That support our expectations for continued growth. This year. On slide four, we thought it would be valuable to discuss some of the investments we've made in our business. Over the last several years which position us well to perform in situations of economic uncertainty like we currently face. I'd like to caveat that the situation has been highly fluid as you all know. And we are following it closely. I'm extremely impressed with our team and their ability to pivot and navigate through the day to day challenges. It speaks to the level of talent we have across the organization. First, as we discussed on our last call, we've taken significant steps to diversify our supply chain since the Section three zero one tariffs on Chinese imports went into effect in 2018 and 2019. Entering 2025 and before the new tariffs were put into effect, we have been executing a plan to continue to reduce our share of product source from China.

14m 27s

In 2025, we estimate that approximately 30% to 40% will be sourced from partners in China approximately 30% from The US, and the remainder from various regions around the world. We'll continue to remain focused on optimizing our supply chain strategy. We believe this level of diversification gives us a competitive advantage It's not just an effort to capture cost savings. Our asset light manufacturing strategy expertise stand out as competitive advantages. Allowing us to identify and partner with leading manufacturers around the globe to drive redundancy, flexibility, and resiliency within our supply chain. The end result is better products at better prices for our customers and end users. Through our strategic sourcing investments, we've developed strong relationships with our supply partners. Our scale often makes us a strategic customer for our vendors. In many instances, we're one of their largest customers. This scale and strategic position fosters deep partnerships with our suppliers that ultimately benefit our customers and end users. Next, the products that we sell play an essential role everyday life. Our products help people get to work, get their kids to school, take vacations, and visit friends and family. Our products also help businesses keep their goods flowing from point A to point B. And provide everyday services to local communities.

16m 1s

Majority of our product portfolio is non discretionary in nature. So if you are in need of one of our parts, odds are your vehicle is not operating or not operating safely. Non discretionary parts have historically done well in uncertain economic times. And for decades, we have successfully navigated various diverse economic environments. Furthermore, we believe our innovation strategy and the strength of our brands position us well to succeed. Our innovative solutions, are core not only to our success, but also to the success of our customers and technicians. Who rely on our new products for their own growth and profitability. We've also strategically invested in our brands over the last several years. Which has led to the Dorman, Dayton, and Super ATV brands being sought after in their respective segments. And finally, our financial profile serves as a significant benefit to our investors and customers. We have a strong balance sheet and liquidity position, allowing us to manage higher costs from tariffs in the short term to invest in inventory to our customer needs, and to capitalize on strategic growth opportunities along the way. We expect our strong financial foundation will stand out as a key competitive advantage compared to our peers.

17m 26s

In the end, we have the experience and playbook in the right set of solutions, suppliers and customers along with the financial strength to navigate the changing trade environment. Before I turn it over to David, let me touch on the observations we're seeing across our segments on Slide five. These observations include what we've experienced leading up to the recent tariff announced and what we see looking forward in the new trade and economic environment. Starting with light duty, as I mentioned, positive macro trends continued into the year. Vehicle miles traveled climbed higher year over year and we expect that used vehicles will continue to stay on the road longer both of which are key contributors to the excess of the aftermarket. During the quarter, customer demand was strong. A trend that followed through from the end of twenty twenty four. In particular, we had a strong season with our patented oil filter housing product that we've discussed in previous calls. This, along with the success of our other recent new products, were key contributors to our growth. In our Heavy Duty segment, the soft market conditions that impacted trucking and freight markets in 2024 continued through this year's first quarter.

18m 46s

While the early signs of stabilization we spoke of on our last call continued the first few months of 2025. The announcement of tariffs and the impact on demand for trucking and freight began creating additional uncertainty in the market late in the quarter. We're watching closely and we'll continue to position the business for long term success through portfolio expansion productivity initiatives. In Specialty Vehicle, we remain encouraged with the enthusiasm behind the UTV and ATV markets. The feedback we get from end users is that they are very engaged and positive. We're not seeing a pullback in ridership. However, consumer spending softened during the quarter and maybe a headwind moving forward. We remain focused on expanding our portfolio of non discretionary parts capturing share and expanded dealer network as the market rebounds. With that, I'll hand it off to David to review our Q1 financial performance.

19m 46s

Thanks, Kevin. As we turn to Slide six, I'd like to point out we maintained our positive momentum from the fourth quarter. Consolidated net sales in the first quarter were $5.00 $8,000,000 up 8% year over year. Driven by strong customer demand. Light duty again drove above market sales growth, on positive macro trends and the success of our new products. I'll cover each of our segments more in just a moment. Adjusted gross margin for the quarter was 40.9% a two twenty basis point increase compared to the prior year period. Margin expanded on the strong sales growth and favorable mix of new products. Coupled with cost savings generated from supplier diversification as well as productivity and automation initiatives. Adjusted SG and A expense as a percentage of net sales was 23.9%, down 100 basis points compared to the first quarter of twenty twenty four. Adjusted operating income was $86,000,000 in the first quarter, up 33% compared to the same period last year. Adjusted operating margin expanded three ten basis points to 17% largely from the gross margin improvement I just discussed. Finally, adjusted diluted EPS in the first quarter was $2.02 up 54% compared to last year's first quarter.

21m 20s

Along with increased adjusted operating income and lower interest expense as a result of our debt repayments over the last twelve months. Our effective tax rate benefited from a timing difference in the quarter. Finally, our share repurchase program activity over the last year contributed to positive EPS growth. Next, let me provide updates on each of our business segments starting with light duty on Slide seven. Light duty's performance in the first quarter was outstanding. With net sales increasing 14% year over year. The growth was driven by strong customer demand especially for our new products, with foundationally positive macro trends continuing through the first quarter. POS was up high single digits, versus shipments that were up low teens in the quarter. Light duty also drove strong margin improvement, with segment operating margin increasing to 19.9% for the [indiscernible] a three eighty basis point increase compared to the same period last year. This margin expansion benefited from new product mix and cost savings from our ongoing automation and productivity initiatives, along with higher leverage on our volume. Turning to Slide eight. Heavy duty net sales were again impacted by continued market pressures in freight transportation, and the trucking aftermarket.

22m 51s

Net sales were down 11% year over year and segment operating margin turned slightly negative as the business has a larger fixed cost manufacturing footprint in our U. S. Manufacturing plants compared to our other segments. While the early signs of stabilization we mentioned on our last call continued to play out through the first few months of the year, The uncertainty that tariffs inject into the trucking and freight markets give us further pause to call for a rebound in our business. That said, continue to invest in new product development and commercialization initiatives to capture share and best serve our customers when the market does turn. Moving to slide nine, UTV and ATV ridership in the Specialty Vehicles segment remains healthy. But in the first quarter, net sales declined 9% year over year which proved to be a notable shift from the growth we saw at the end of last year. We expect this turn was a result of consumer sentiment changing after the holiday season and as uncertainty around tariffs took hold. This weakened confidence level in the economy will likely continue given general uncertainty in tariffs, but we expect demand to return once the economy restabilizes.

24m 13s

To best serve our customers and riders, we'll continue to invest in product offerings through our internal innovation funnel and through tuck in acquisitions of value added brands. We'll also continue to expand our dealer network to further broaden our market share. On the margin front, segment operating margin declined to 10.2% in the quarter. The main driver of this decline was the deleverage of our fixed costs as sales declined. Similar to the heavy duty business, we manufacture a portion of our products internally in The U. S. Within our operations, we are taking appropriate actions to mitigate margin degradation should the market softness continue in the future. Turning to our cash flow on Slide 10. Our cash flow in the quarter was solid. A strong earnings growth offset by investments we made in inventory. Free cash flow in the first quarter was $40,000,000 essentially in line with the same period last year. During the quarter, we deployed $11,000,000 in capital expenditures repaid $20,000,000 in debt and repurchased $12,000,000 of our common stock. The cash flow we've generated and our use of cash over the last eight quarters have positioned us well with the liquidity to manage increased costs as a result of the tariffs.

25m 40s

I'll touch on our liquidity in just a minute. But I wanted to highlight that our capital allocation strategy has proved to be a key value driver for Dorman. As we look forward, our long term strategy doesn't change. We will continue to look at our debt and leverage targets first, and then utilize our cash to invest internally as that is where we get our greatest return. We'll then look to invest in strategic growth opportunities and opportunistically repurchase shares. That said, in the short term, we'll be utilizing a portion of our cash and balance sheet flexibility to fund a higher cost of inventory. Resulting from the tariffs. On Slide 11, we highlight much of what we've already covered, which is that we believe we have the balance sheet capacity and liquidity to help finance the cash needed for the significant increase in inventory costs we anticipate as a result of the tariffs. As you can see, net debt was reduced $4.00 $2,000,000 and our net leverage ratio was 1.01x adjusted EBITDA down from 1.12x at the end of last year. Additionally, our total liquidity increased to $660,000,000 at the end of the quarter up from $642,000,000 at the end of twenty twenty four.

27m 1s

In the end, we expect the strength of our balance sheet will be a competitive advantage against the market conditions we currently face. Turning to Slide 12. I'd like to cover our guidance for 2025. Given our performance in the first quarter and the future outlook for our underlying business, we are reaffirming our 2025 net sales growth guidance of 3% to 5% and adjusted diluted EPS guidance range of $7.55 to $7.85 Please note that this guidance does not include any impact related to U. S. Tariff enacted or proposed in 2025. For any potential retaliatory measures from U. S. Trade partners. As you know, the situation remains highly fluid and negotiations between various countries and the administration are ongoing. Adding to the fluidity, our conversations and negotiations with our suppliers and customers are ongoing as well.

28m 5s

With this level of uncertainty, we felt it was prudent to continue providing our positive view of the underlying business and not include any impact from increased pricing or higher costs associated with the tariffs. As the situation gains more clarity, both at the macro level and for Dorman, We'll look to provide an updated view with the impacts to our expected results. And finally, for modeling purposes, we continue to expect a 24% effective tax rate, With that, I'll now turn it back over to Kevin to conclude. Kevin? Thanks, David. I'll just reinforce what we've said throughout. First and foremost, we had an outstanding first quarter. That positions us well for growth this year. While there is significant level of uncertainty that exists with tariffs, we have the experience and talent to address the challenges ahead. Additionally, we have a stronger supplier base, a more diversified customer base, and a stronger financial foundation than we've ever had before. We'll continue focusing on the needs of our customers and end users. And look to capitalize on the opportunities we see in the market. Place. With that, I would now like to open the call up for questions. Operator? Thank you.

29m 25s

We will now begin the question and answer session. If you have dialed in and would like to ask a question, If you are called upon to ask your question and are listening via speakerphone on your device, pick up your handset to ensure that your phone is not on mute when asking your question. Again? Press 1 to join the queue. And our first question comes from the line of Scott Stember with ROTH Capital Partners. Your line is open.

30m 3s

Good morning, guys, and thanks for taking my questions. Good morning, Scott. Good morning, Scott. Very strong performance in heavy duty. Very strong high single digit POS a few ticks below the sell on. So I guess the first question is have you seen any of your bigger customers buying ahead to get ahead of tariffs And if not, is this just a function that the difference of you guys gaining shelf space with some of your bigger faster growing partners that are expanding rapidly?

30m 38s

Yeah. Good. It's Kevin. Good good question, Scott. The light duty business was very strong in the quarter. It followed a very strong fourth quarter as well. Our POS, as we noted, in the prepared remarks, was up high single digit. Very similar to what we were seeing last year. Really driven by our new product performance And the macros continue to be favorable as well as we mentioned. Our sell in growth actually did exceed our POS growth in the quarter. Really as a result of an easier comp in the quarter. If we look back and you look at the two year stack in the quarter, kind of more in line with what the POS growth that we saw as some timing issues last year in the first quarter versus the fourth quarter of twenty twenty three. To answer your question around the buy ahead we haven't seen any any indications at this point yet of customers getting ahead of the tariffs, at least from ordering from us That could potentially happen, but as of now, we haven't seen any meaningful evidence of that.

31m 54s

Got it. And, you know, on tariffs, obviously, appreciate there's a lot of uncertainties here and it's it's hard to predict anything. But with a 45% as it stands right now, you know, some folks are concerned of, you know, what impact it'll have on your business. So it sounds like you're you're a lot better positioned than you were the last time. Around with tariffs. But could you just again, remind us of some of the mitigation efforts that you have in place. And then timing of when we would actually start to see anything hit your your results.

32m 29s

Yes, sure. I mean, as you mentioned, Scott, again, it's Kevin. It's really too early to tell. It's a very fluid situation that the two thirty two auto tariffs just went into effect a couple of days ago. And as we talked about, we do have a very diverse supply chain you know, much more diverse than it was, say, five, six years ago. And that that's intentional. You know, I'll just reiterate, what our what our footprint looks like. Across Dorman. Roughly 30% to 40% is sourced from China. In 2025, we estimate, and that's obviously depending on product mix. Approximately 30% is in The U. S. And the balance is really spread around the rest of the globe. I also want to point out keep in mind that the vast majority of our parts Scott, are nondiscretionary in nature. And, it's really been fairly inelastic you know, historically as we've gone through periods like this. And just to hit on your point is when it when it impacts us, Again, we're on FIFO inventory. And it all depends on when some of these tariffs have started to come into effect.

33m 57s

But in general, we won't see you know, a lot of these tariffs for, you know, roughly six months or so after we start incurring them just because of FIFO. In regards to your pressure on mitigation, I mean, look, we've we've, we've been down this road before. Feel like we have a a really good playbook to deal with this. We're obviously, we're gonna look to negotiate with our both our supply base in terms of cost concessions, driving further productivity initiatives in the business and then obviously look to offset any difference through price change.

34m 45s

Great. That's all I have for now. I'll get back in the queue. Thank you.

34m 49s

Thanks, Scott.

34m 52s

Our next comes from the line of Bret Jordan with Jefferies. Your line is open.

34m 57s

Hey guys, good morning.

34m 59s

Good morning, Brett. On that EBIT margin in Light Vehicle, you talked about product mix versus leverage on the volume Could you sort of break out what was product mix versus leverage on the volume? You talked about a lot of new to the aftermarket in the oil filter housing and you know, could you just sort of pocket where that pretty solid margin expansion came from?

35m 22s

I mean, Brad, if you look we've been generating these type of operating margins in light duty for quite some time now. And really, it mostly due to our product mix We don't spike out exactly how much is due to just core business. A lot of it is due to the new product mix. And as we've talked about before, we've had some really successful new products come to market. But also, you know, the macros have improved. Right? I mean, if you look at the sweet spot, you know, the the seven to fourteen year old vehicle, which is where we really target new product development. You know, that vehicle cohort has really grown over the last couple of years, and we we see that cohort continuing to grow over the next three to four years. Those two factors have really enabled us to expand margin in the light duty side.

36m 18s

Okay. Then I guess when you think about the more commoditized mix in the the portfolio, maybe chassis, and your supply chain footprint versus competition, is there any material difference or is everybody pretty much exposed in the same countries? If you thought about yourself versus maybe the TEDCO chassis businesses or the MEVETECH chassis businesses? Is there any risk that someone will be advantaged given their geographic mix or is pretty much everybody the same?

36m 47s

Yeah. Good question, Brett. I'm not going to comment on any specific category, but I think overall, you're going to see some of that. In terms of depending on where all the tariffs settle out, which which I don't think anyone really knows at this point, There will be situations where someone may be advantaged versus somebody else. I'll just say that as we look at our footprint, and if you look at kind of the exposure to to kind of the highest tariff region now, hard parts is very still very indexed to China. And if we look at kind of our exposure, we think we're a lot less exposed than most. And given our balanced, put around the globe overall, we we see ourselves in a a competitive advantage situation.

37m 42s

Okay. Great. And then on pricing, in the event we do get tariffs and you know, is the conversations with your large retail customers, does it sound as if everybody is still expecting to be able to pass most of these through? Or is just the magnitude of the tariff something that some place along the line of the supply chain or the retailers that have to eat some of this higher cost?

38m 6s

Yeah, Brett. You know, I'm not gonna comment on what our customers are are gonna do, but I'll just say that from our perspective, we're pretty comfortable that we can offset the net impact at the end of the day. Keep in mind, again, our portfolio is mostly nondiscretionary repair parts, hard parts. Our customers, we're a strategic partner. To all of our customers. We have a strong brand. Both to our customers and the end users. And we have a proven playbook. I mean, we've done this before. [indiscernible] And at the end of the day, we think we'll be successful wherever this ends up.

38m 55s

Great. Thank you. You got it.

39m 2s

Next question comes from the line of Gary Prestopino with Barrington Research. Your line is open.

39m 10s

Good morning, everyone. Morning, Gary.

39m 15s

David, just a couple of questions on the income statement. It looked like your interest expense really stepped down sequentially. And I'm wondering is that looks like net interest was about 7,400,000.0 or something like that. Is that a good number to use for the rest throughout the rest of the of the year on a quarterly basis? Or was there something in there that caused that step down?

39m 42s

Yes, Gary, it's David. We've been focused, as you know, on paying down our debt since the acquisition, and we paid down close to $270,000,000 over the last couple of years. Which has brought our leverage down to one time EBITDA. So the balance sheet strong as it's ever been. We feel really confident about our ability to navigate in this current situation. As far as the interest expense, Gary, I think using the current quarter is probably a good assumption for your model.

40m 13s

Okay.

40m 13s

Great. That's very helpful. And then could you maybe just getting back to these these this whole issue.

40m 23s

With the tariffs and all that, versus when this happened before, which was, I think, 2839, I believe. How much of your product was then sourced from China And then you know, what takeaways did you get from that experience that you you know, could definitely use in in this current environment if the tariffs start really impacting the price of products. Yes, Gary, it's Kevin. Good question. I think six, seven years ago when we went through that before, I believe we disclosed you know, roughly 70 plus percent was China, Taiwan, of which a vast majority of that was China. Think that was the disclosure back then. So we're in a different place as we look at Dorman today. When we think about mitigation efforts, what have we learned think at the end of the day, that event six, seven years ago caused us to really look at diversifying the supply chain, building a more resilient supply chain, and we've been very successful doing that. So we have kind of a core base of of knowledge of of these other regions. We know where there's capacity. We know where we can source quality parts at the right value.

41m 54s

Around the globe. We have experienced folks in all these regions at this point. At the end of the day, we've spent a lot of time driving productivity throughout our business. We've talked about before. We've undertook an automation exercise where or strategy initiative where we have automated our distribution facilities And we're going to continue to look to drive cost out of the business. And whatever net cost we have left, we we look to to offset that in price. Okay. And then just if I could just sneak one more in, it's a real easy one. You cited new products as driving growth in the quarter. Would you be able to maybe not quantify the actual numbers, but level of sales but how many, you know, how many basis points within a range of the growth for the quarter was contributed by new products? Yes. Gary, we don't break that out. But I will tell you that if you look at the overall market, growth across the industry, you're looking at low single digit. Growth. And that's kind of compared to high single digit POS growth that we experienced. For the most part, that differential is driven by new products.

43m 27s

I mean, that has been our model.

43m 30s

It'll continue to be a business model We've been very comfortable saying historically that we're able to significantly outperform market growth because of our business model. So we think that's going continue. No. Thank you. That's very helpful explanation. Appreciate it. Thank you.

43m 53s

Next question comes from the line of Justin Ages with CJS Securities. Your line is open.

44m

Hi, good morning all. Good morning.

44m 5s

Appreciate the color on how much is sourced from China. Can you give us any indication how that splits up amongst the segments? Like, of that 30 to 40%, is the majority going to light duty? Or any color on that would be helpful. Yes, Justin. Good question. We're not going to get into the details or disclose the impact in our different segments mainly because frankly it's too fluid at this point and for competitive reasons. I will make a couple of comments though on each individual segment. In light duty, as I mentioned before, we believe we have a very diversified supply chain. And footprint. We have less exposure, as I mentioned before, to the overall hard parts market in the aftermarket. We think significantly so. So overall, we view that we have a competitive advantage in relation to the competitive set in light duty. If you look at heavy duty, very modest impact from tariffs. We believe, again, as we look around the competitive landscape that we're well advantaged there. In specialty vehicle, we do have some exposure to China. But we also have a large manufacturing footprint in The U. S. In Madison, Indiana. If we look at that entire industry, it's very heavily indexed to China.

45m 38s

So again, we think we're well positioned as we look against the competitive set. And also keep in mind, Justin, that we do have a pretty good footprint here in The U. S. I mentioned before, we do source roughly 30% of our products here in The US, some of that through our own plants We do have six Dorman owned manufacturing plants in The U. S. And obviously we'll look to leverage them as much as we can where it makes sense. Alright. That's very helpful. I appreciate you taking the question. You got it, Justin. Thank you.

46m 18s

And we have a follow-up question from Scott Stember with ROTH Capital Partners. Your line is open.

46m 24s

Hey guys, just one follow-up. These $2.32 tariffs I'm just trying to figure out if you guys have been able to ascertain whether there'll be any exemptions and also talking about you know, the the president talking about, on auto parts there being some kind of a clawback. I'm not sure if that is related to just the OEM and OEM production or is there some benefit or offset for the pure aftermarket?

46m 55s

Yeah. Scott, we're still working through that. But in general, you know, the auto part, the $2.32 tariffs is is really tied to the HTS code. And where we have parts that fall into those codes, we're obviously subject to that tariff. And there's there's a bunch of other tariffs as well and they all interplay. But for the most part, it's, that exemption was for the OE. But we're still evaluating the impact on Dorman.

47m 29s

Got it. Thanks again.

47m 31s

Got it.

47m 35s

Ladies and gentlemen, that concludes the question and answer session. Thank you all for joining and you may now disconnect.

Key Insights

Dorman reported an outstanding Q1 2025, with consolidated net sales up 8% year-over-year to $508 million, adjusted operating margin expanding to 17% (up 310 basis points), and adjusted diluted EPS increasing 54% to $2.02; free cash flow was $40 million, enabling $20 million in debt repayment and $12 million in share repurchases.
The company reaffirmed its 2025 guidance for net sales growth of 3% to 5% and adjusted diluted EPS of $7.55 to $7.85, excluding any impact from newly enacted or proposed U.S. tariffs or potential retaliatory trade measures.
Dorman has significantly diversified its supply chain since previous tariff rounds, now sourcing approximately 30-40% from China, 30% from the U.S., and the remainder globally, positioning itself with a competitive advantage and reduced exposure compared to peers.
Segment performance: Light Duty saw strong growth (net sales up 14%, operating margin up to 19.9%), driven by new products and favorable macro trends; Heavy Duty faced continued market pressures with net sales down 11% and a slightly negative margin; Specialty Vehicles saw net sales decline 9% due to softer consumer spending and tariff uncertainty, with operating margin down to 10.2%.
Management highlighted that most of Dorman’s products are non-discretionary, supporting resilience in uncertain economic times, and stated that the company is well-positioned to mitigate tariff impacts through supplier negotiations, productivity initiatives, and potential price adjustments, with any tariff cost impacts expected to be seen roughly six months after implementation due to FIFO inventory accounting.

Recent Transcripts

Q1 2025 delivered strong 8% sales growth, margin expansion, and 54% EPS increase.

Dorman achieved record $2B+ sales, strong margins, and robust cash flow in 2024.

Market Cap: $3.8B
IPO Date: 3/12/91
CEO: Kevin M. Olsen
Fulltime Employees: 3.8K
Sector: Consumer Cyclical
Industry: Auto - Parts
Country: US
Exchange: NASDAQ Global Select

Peers

$0.00

Watchlist

$0.00

Earnings

Report Date

May 5, 2025

Reported Revenue

507.7M

Miss -3.3%

Avg 1d Change

6.65%

Report Period

Q1 2025

Reported EPS

Beat +36.49%

Implied Move 1d

6.07%

Transcript

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34m 45s

Great. That's all I have for now. I'll get back in the queue. Thank you.

34m 49s

Thanks, Scott.

34m 52s

Our next comes from the line of Bret Jordan with Jefferies. Your line is open.

34m 57s

Hey guys, good morning.

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38m 6s

38m 55s

Great. Thank you. You got it.

39m 2s

Next question comes from the line of Gary Prestopino with Barrington Research. Your line is open.

39m 10s

Good morning, everyone. Morning, Gary.

39m 15s

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40m 13s

Okay.

40m 13s

Great. That's very helpful. And then could you maybe just getting back to these these this whole issue.

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43m 27s

I mean, that has been our model.

43m 30s

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Next question comes from the line of Justin Ages with CJS Securities. Your line is open.

44m

Hi, good morning all. Good morning.

44m 5s

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And we have a follow-up question from Scott Stember with ROTH Capital Partners. Your line is open.

46m 24s

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47m 29s

Got it. Thanks again.

47m 31s

Got it.

47m 35s

Ladies and gentlemen, that concludes the question and answer session. Thank you all for joining and you may now disconnect.

Key Insights

Dorman reported an outstanding Q1 2025, with consolidated net sales up 8% year-over-year to $508 million, adjusted operating margin expanding to 17% (up 310 basis points), and adjusted diluted EPS increasing 54% to $2.02; free cash flow was $40 million, enabling $20 million in debt repayment and $12 million in share repurchases.
The company reaffirmed its 2025 guidance for net sales growth of 3% to 5% and adjusted diluted EPS of $7.55 to $7.85, excluding any impact from newly enacted or proposed U.S. tariffs or potential retaliatory trade measures.
Dorman has significantly diversified its supply chain since previous tariff rounds, now sourcing approximately 30-40% from China, 30% from the U.S., and the remainder globally, positioning itself with a competitive advantage and reduced exposure compared to peers.
Segment performance: Light Duty saw strong growth (net sales up 14%, operating margin up to 19.9%), driven by new products and favorable macro trends; Heavy Duty faced continued market pressures with net sales down 11% and a slightly negative margin; Specialty Vehicles saw net sales decline 9% due to softer consumer spending and tariff uncertainty, with operating margin down to 10.2%.
Management highlighted that most of Dorman’s products are non-discretionary, supporting resilience in uncertain economic times, and stated that the company is well-positioned to mitigate tariff impacts through supplier negotiations, productivity initiatives, and potential price adjustments, with any tariff cost impacts expected to be seen roughly six months after implementation due to FIFO inventory accounting.