Dorman Products, Inc. · NASDAQ:DORM
Dorman Products — Investor Presentation (May 2017)
18 slides from Dorman Products's investor presentation, May 2017
Slide 1: New. Since 1918 - May 2017
= NEW.SINCE 1918 NEW PRODUCTS ¢ NEW SOLUTIONS ¢ NEW OPPORTUNITIES
Slide 2: Forward Looking Statements
Forward Looking Statements Certain statements in this presentation constitute “forward‐looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “believe,” “demonstrate,” “expect,” “estimate,” “forecast,” “anticipate,” “should” and “likely” and sim
Slide 3: Agenda
Agenda Dorman Snapshot Industry Dynamics Growth Strategy Financial Results Summary 3
Slide 4: Dorman History
Dorman History ► Founded in 1978 • NASDAQ Listed Since 1991: DORM • Founding Family = 21% Ownership ► Leading Aftermarket Supplier of Dealer Exclusive Parts ► TTM Net Sales of $873 Million • TTM net sales growth of 7% • 5 year CAGR of 11% — All Organic Dorman Offers Over 180 Categories with > 155,00
Slide 5: Dorman's Core Automotive Competencies
Dorman’s Core Automotive Competencies Unique Business Model: Broad Distribution “New-to-the-Aftermarket” U.S. Other Traditional 5% 46% U.S. Retail 49% Global Design, Development Broad Product Portfolio and Sourcing Capabilities Focuses on ‘Niche’ Offerings Hardware Auto Body 5% 29% Chassis 26% Power
Slide 6: Industry Dynamics
Industry Dynamics Sources: 2016 Auto Care Association Factbook, US Dept of Trans, and US Energy Information Admin. 6
Slide 7: New Products Driving Growth
New Products Driving Growth ► Growth Rates Outpace the Broader Aftermarket ► New Product Revenues Creates Growth • Items Previously Only Available at the OE Dealer or Salvage Yard • New Products = Comp Store Sales Growth for Customers 7
Slide 8: New-to-the-Aftermarket Products
New‐to‐the‐Aftermarket Products New Product Sales Opportunities for Our Customers: 2014 2015 2016 YTD Q117 LTM Q117 New to the Aftermarket 1,266 1,495 1,255 372 1,255 Line Extensions (many of which are exclusive items) 2,476 3,357 2,965 918 3,152 Total unique parts introduced 3,742 4,852 4,220 1,290
Slide 9: New-to-the-Aftermarket Engine
New‐to‐the‐Aftermarket Engine ► Unique Installer Relationships and Feedback Network to Identify Failure‐prone OEM Parts • Products introduced in last two years generated 17% of sales in 2016 ► Culture of Contribution Drives Innovation • 375+ product personnel in 10+ co‐located teams in US and Asia •
Slide 10: 2017 Marketing Focus
2017 Marketing Focus The destination for formerly ‘Dealer Only’ Engineered solutions designed to correct Emphasized with: known OE Failures • Web • Print • Video • Email • Advertising • Social Media Videos New Service Product Dealer Alerts Guides Market‐leading product education Core category awaren
Slide 11: Growth: Market Expansion and Opportunistic Acquisitions
Growth Market Expansion ► US and Canadian Light Duty Automotive Markets ► Medium & Heavy Duty Aftermarket • Currently ~2% of Sales Opportunistic Acquisitions ► Expertise in Automotive ► Heavy Duty Distribution ► New North American Market 11
Slide 12: Financial Results Summary
Financial Results Summary ► Consistent track record of organic revenue and EPS growth • 5 year sales CAGR of 11% through 2016 • 5 year EPS CAGR of 15% through 2016 ► Stable gross and operating margin trends ► SG&A leverage despite higher product development investments ► Operating margin expansion ►
Slide 13: Strong Organic Sales and Earnings Growth
Strong Organic Sales and Earnings Growth Sales (in millions) – 5 year CAGR 11% EPS – 5 year CAGR 15% [1] [ 1 ] ‐ 2014 includes $4.6 million in incremental ERP transition costs ($0.08 per share) ‐ 2015 includes $3.5 million in incremental ERP transition costs and $3.0 million in bad debt provision ($
Slide 14: Summary Income Statement
Summary Income Statement Three Months Fiscal Year 2017 2016 2016 2015 Net Sales $ 221,625 $ 208,148 $ 859,604 $ 802,957 Gross Profit 88,743 80,594 338,074 308,050 Margin 40.0% 38.7% 39.3% 38.4% SG&A 43,701 41,663 169,473 161,893 Op. Income 45,042 38,931 168,601 146,157 Margin 20.3% 18.7% 19.6% 18.2%
Slide 15: Summary Balance Sheet
Summary Balance Sheet March December 2017 2016 Cash $ 156,344 $ 149,121 AR 232,924 230,526 Inventory 171,762 168,851 Other current assets 2,972 3,116 P,P & E, net 88,836 88,436 Goodwill and other assets 85,763 71,742 Total Assets $ 738,601 $ 711,792 Debt $ - $ - Current liabilities 110,449 103,848 L
Slide 16: Summary Cash Flows
Summary Cash Flows Three Months Fiscal Year 2017 2016 2016 2015 Net Income $ 29,187 $ 24,671 $ 106,049 $ 92,329 Dep'n and Amort'n 5,005 4,499 18,907 16,186 Change in AR (2,473) (4,468) (27,824) (1,148) Change in Inventory (818) 6,139 24,874 (20,202) Change in AP (668) (11,930) 8,662 5,389 Other W/C
Slide 17: Recap
Recap ► Dominant New‐to‐the‐Aftermarket Parts Supplier ► Strong Growth Opportunities ► Long Track Record of Revenue and Cash Flow Growth ► Solid Balance sheet 17
Slide 18: Questions?
Questions? Matt Barton Kevin Olsen President and Chief Executive Officer SVP – Chief Financial Officer mbarton@dormanproducts.com kolsen@dormanproducts.com 215‐712‐5132 215‐712‐5182 18