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Dec 31, 2022
Dorman Q4 2022 Earnings Report
Reported record net sales with increased revenue and acquisition of SuperATV.
Key Takeaways
Dorman Products reported a strong fourth quarter with record net sales of $501.3 million, a 25.9% increase year-over-year. EPS was $0.57, while adjusted EPS was $1.01. The company benefited from an extra week in the fourth quarter and the acquisition of SuperATV.
Achieved record net sales of $501.3 million, up 25.9% year-over-year.
Diluted earnings per share was $0.57, compared to $1.07 in Q4 2021.
Adjusted diluted EPS was $1.01, compared to $1.33 in Q4 2021.
Gross profit was $157.8 million, or 31.5% of net sales.
Dorman
Dorman
Forward Guidance
The Company is issuing full-year 2023 guidance, detailed in the table below, which includes the impact of the SuperATV acquisition but excludes any potential impacts from future acquisitions, additional supply chain disruptions, or share repurchases.
Positive Outlook
- Demand remains robust for our products driven by strong macro fundamentals across the vehicle aftermarket.
- Vehicle miles driven continue to increase.
- The average age of vehicles continue to rise.
- The number of cars in our 8 to 13-year-old sweet spot for the aftermarket continues to grow.
- A shortage of new vehicles benefit the aftermarket.
Challenges Ahead
- We anticipate first quarter adjusted gross margin percentage and adjusted SG&A dollars will be in line sequentially with fourth quarter 2022.
- However, operating margins and adjusted earnings per share are expected to be significantly lower than the fourth quarter of 2022, driven by seasonally lower sales levels.
- We remain encouraged by the easing of inflationary costs we have seen over the past several months and anticipate meaningful improvements in our gross margins throughout 2023 and expect to exit the year at a rate approaching pre-COVID levels.
- Finally, as we reduce lead times and safety stocks as a result of improvements in global supply chains, combined with the impact of lower material and freight costs, we anticipate inventory values to meaningfully decline throughout 2023.
- While our overall capital allocation strategy over the long term will not change, based on current conditions we plan in the short term to utilize excess cash from lower inventory requirements to reduce our debt.