COLMAR, PA — Dorman Products, Inc. (NASDAQ: DORM), a leading supplier in the automotive aftermarket industry, reported a slight increase in net sales and a significant jump in profitability for the first quarter of 2024. The company’s financial performance indicates robust operational efficiency and strategic financial management, aligning with its optimistic outlook for the rest of the year.
In the quarter ending March 30, 2024, Dorman posted net sales of $468.7 million, a marginal rise from the $466.7 million recorded in the corresponding period last year. Despite this modest increase in sales, the company achieved a dramatic enhancement in profitability, with diluted earnings per share (EPS) soaring by 483% to $1.05, up from $0.18 in the first quarter of the previous year. Adjusted diluted EPS also saw a substantial climb, registering a 134% increase to $1.31 from $0.56.
The company’s financial health was further underscored by a significant improvement in cash generation. Operating activities generated $52 million in cash, nearly doubling the performance year-over-year. This financial muscle allowed Dorman to repay $15 million of debt and repurchase $27 million of its shares, reflecting confidence in its long-term value.
Kevin Olsen, President and CEO of Dorman, attributed the strong start to 2024 to the team’s relentless focus on delivering innovative products. “Our results were in line with our expectations, as Light Duty industry fundamentals remained strong while the Heavy Duty and Specialty Vehicle industries experienced softness,” Olsen stated, expressing confidence in the company’s ability to meet challenges head-on.
The gross profit margin for the first quarter stood at 38.7%, up significantly from 31.0% in the previous year, indicating improved operational efficiency and cost management. Selling, general, and administrative (SG&A) expenses held steady as a percentage of net sales, signaling disciplined expense control amidst growth initiatives.
Looking ahead, Dorman has reaffirmed its full-year guidance for 2024, projecting net sales growth of 3% to 5% over 2023 and adjusted diluted EPS in the range of $5.40 to $5.70. This forward-looking stance takes into account various factors, including anticipated tax rates, workforce adjustments, and potential market disruptions without considering future acquisitions or divestitures.
Dorman’s first-quarter performance not only showcases its resilience amidst varied market conditions but also positions the company favorably for continued success in the competitive automotive aftermarket sector. With a clear strategy and effective execution, Dorman remains poised to capitalize on growth opportunities while enhancing shareholder value.
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