COLMAR, Pa., Feb. 22, 2021 (GLOBE NEWSWIRE) -- Dorman Products, Inc.(NASDAQ:DORM), a leading supplier in the automotive aftermarket industry, today announced its financial results for the fourth quarter ended December 26, 2020.

Fourth Quarter Financial Results
The Company reported fourth quarter 2020 net sales of $301.2 million, up 26% as compared to net sales of $239.6 million in the fourth quarter of 2019. Record sales performance in the quarter was primarily organic and driven by strong customer demand.

Gross profit was $111.4 million in the fourth quarter of 2020, or 37.0% of net sales, compared to $78.3 million, or 32.7% of net sales, for the same quarter last year. Adjusted gross margin* was 37.0% in the fourth quarter of 2020 compared to 32.8% in the same quarter last year. Gross margin expansion was driven by improved efficiencies, as well as lower provisions for excess and obsolete inventory as part of the Company’s ongoing efforts to streamline its end-to-end supply chain processes. Additionally, the Company benefitted from the absence of certain charges that impacted gross margin in the prior year quarter, including increased customer return provisions and a charge related to historical underpayment of customs duties. These benefits were partially offset by increased freight costs due to global transportation and logistics constraints related to the ongoing COVID-19 pandemic.

Selling, general and administrative (“SG&A”) expenses were $65.5 million, or 21.7% of net sales, in the fourth quarter of 2020 compared to $56.4 million, or 23.5% of net sales, in the same quarter last year. Adjusted SG&A expenses* were $62.3 million, or 20.7% of net sales, in the fourth quarter of 2020 compared to $57.7 million, or 24.1% of net sales, in the same quarter last year. Approximately 440 basis points of the decrease in SG&A as a percentage of net sales was due to improved leverage from the $62 million increase in net sales as compared to the fourth quarter of 2019. Additionally, Dorman drove increased operational cost savings in the quarter from productivity improvements at our Portland, TN facility, which were offset by higher incentive compensation and employee stock purchase plan expenses.

Income tax expense was $10.0 million in the fourth quarter of 2020, or 21.8% of income before income taxes, compared to $4.2 million, or 19.5% of income before income taxes, recorded in the same quarter last year. The increase in the effective tax rate was due to increased state income tax and higher income of foreign entities included within the consolidated U.S. tax group.

Net income for the fourth quarter of 2020 was $36.0 million, or $1.11 per diluted share, compared to $17.5 million, or $0.54 per diluted share, in the prior year quarter. During the fourth quarter of 2020, we estimate a negative impact of $0.04 to diluted EPS for out-of-pocket costs related to COVID-19 pandemic, which was partially offset by reduced travel expenses. Adjusted net income* in the fourth quarter of 2020 was $38.3 million, or $1.19 per diluted share, compared to $16.8 million, or $0.52 per diluted share, in the prior year quarter.

Fiscal Year 2020 Financial Results
Fiscal 2020 net sales were $1,092.7 million, up 10% as compared to net sales of $991.3 million in fiscal 2019.

Net income for fiscal 2020 was $106.9 million, or $3.30 per diluted share, compared to $83.8 million, or $2.56 per diluted share, for the prior year. Adjusted net income* in fiscal 2020 was $111.6 million, or $3.45 per diluted share, compared to $86.8 million, or $2.65 per diluted share, for the prior year.

Kevin Olsen, Dorman Products’ President and Chief Executive Officer, stated, “I would like to start by thanking all of our Contributors, whose hard work and dedication to serving our customers drove another record-breaking performance this quarter and enabled us to exceed $1 billion in annual net sales for the first time in our history. We delivered record-high net sales and EPS during the fourth quarter, underscored by robust demand across all channels. To meet this strong volume, we continued to drive productivity improvements across our business and flexed our supply chain, which has been critical in light of global logistics challenges due to the ongoing COVID-19 pandemic. We also maintained our commitment to bringing innovative solutions to the aftermarket, as evidenced by a 24% increase in Heavy Duty net sales quarter-over-quarter and strong acceleration in the second half of 2020 of new product launches. We believe our financial position remains healthy and strong, and the actions we took this year, including adjusting our cost structure and investment spending, combined with our strong performance generated $152 million of operating cash flow in 2020, up 59% year-over-year.”

2021 Guidance
The COVID-19 situation remains uncertain and continues to evolve, and it is difficult to determine the full impact that the pandemic will have on overall demand and Dorman’s operations. Therefore, Dorman will not be providing guidance for the 2021 fiscal year at this time.

Mr. Olsen continued, “We are very pleased with our performance in 2020, however, the environment remains extremely fluid given the number of uncertainties regarding the COVID-19 pandemic, including new strains of the virus, freight and logistical challenges and the pace of vaccinations. However, we feel well-positioned for 2021. We will continue to execute on our strategic initiatives and we feel confident that this will result in continued strong organic growth and, combined with pursuing strategic acquisitions, will lead to long term shareholder value.”

Share Repurchases
Dorman repurchased 220,439 shares of its common stock for $20.6 million at an average share price of $93.40 during the fourth quarter of 2020. The Company has $207.1 million remaining under its current share repurchase authorization.

About Dorman Products
At Dorman, we give repair professionals and vehicle owners greater freedom to fix cars and trucks by focusing on solutions first. For over 100 years, we have been one of the automotive aftermarket’s pioneering problem solvers, releasing tens of thousands of replacement products engineered to save time and money and increase convenience and reliability.

Founded and headquartered in the United States, we are a global organization offering more than 81,000 distinct parts, covering both light-duty and heavy-duty vehicles, from chassis to body, from underhood to undercar, and from hardware to complex electronics. See our full offering and learn more at DormanProducts.com.