On this page of StockholderLetter.com we present the latest annual shareholder letter from Dorman Products, Inc. — ticker symbol DORM. Reading current and past DORM letters to shareholders can bring important insights into the investment thesis.

 •  4/7/2025 Letter Continued (Full PDF)
 •  4/4/2023 DORM Stockholder Letter
 •  4/8/2024 DORM Stockholder Letter
 •  More "Auto Parts" Category Stockholder Letters
 •  DORM Benford's Law Stock Score = 99

DORM Shareholder/Stockholder Letter Transcript:

dormanproducts.com
Giving repair professionals, enthusiasts and owners
greater freedom to fix motor vehicles.
2024
ANNUAL REPORT

ANNUAL REPORT
LETTER TO
SHAREHOLDERS
To Our Fellow Shareholders:
We are pleased to report that 2024 was an
outstanding year for Dorman with strong
financial and operational performance. Our
team of dedicated Contributors once again
demonstrated their passion and commitment,
driving significant growth and innovation across
the organization.
For the year, we surpassed $2 billion in
net sales, a milestone achievement in the
company   s history and one we   re proud to
celebrate. Our sales growth during the year was
led by our Light Duty business, which outpaced
the broader aftermarket by capitalizing on the
investments we   ve made in our innovation and
new product development strategy over the last
several years. Our Specialty Vehicle business
also delivered modest net sales growth, which
we believe resulted in us capturing share in a
challenging market environment. While our
Heavy Duty business experienced broad market
pressure throughout the year, the team did
an excellent job expanding our new product
portfolio, which we expect will ultimately
position the business for long-term success as
market conditions improve.
2024 ANNUAL REPORT
We also delivered significant margin
improvement across our businesses, which led
to impressive earnings growth and strong cash
flow generation. Adjusted Operating Income
Margin expanded 400 basis points over last
year as we delivered increased sales in our more
profitable new product lines and drove cost
savings through supply chain diversification and
operational excellence initiatives. This led to an
impressive 57% increase in Adjusted Diluted
Earnings Per Share (EPS). These results also
contributed to healthy cash flow generation,
with Cash from Operations increasing to $231
million in 2024. We utilized this capital to invest
in our business, further strengthen our balance
sheet, and repurchase our shares.
Financial Highlights:
    Achieved record net sales of $2.01 billion, a
4.1% increase over 2023.
    Improved Adjusted Gross Margin by 410 bps,
to 40.2% for the year.
    Increased Adjusted Operating Income by
38% to $323 million, and improved Adjusted
Operating Income Margin 400 bps, to 16.1%
for the year.

2024 ANNUAL REPORT
    Delivered $7.13 in Adjusted Diluted EPS, a 57%
increase compared to 2023.
    Generated $231 million in Cash from Operations, a
16% increase over last year.
    Paid down $94 million of debt and reduced Total
Net Leverage Ratio as determined under our credit
facility from 1.87x to 1.12x.
The investments we   ve made in productivity and
automation initiatives over the last several years
are yielding positive results. On the productivity and
automation front, we   ve installed and implemented
new infrastructure and processes in our distribution
centers to empower a more efficient and safer
work environment for our Contributors, while also
improving the experience for our customers. These
initiatives include autonomous mobile robots, vertical
lift modules, and warehouse execution systems that
reduce picking time, improve our footprint efficiency,
and provide greater speed and accuracy for our
deliveries. We see additional opportunities to further
automate and integrate our systems, and we expect
to continue deploying these technologies and process
improvements within our other facilities to optimize
our operations across the company.
We   ve also continued diversifying and strengthening
our supply chain with a set of leading manufacturers
across the globe. We   ve shifted thousands of SKU   s
to specialized suppliers in new geographies around
the world to help diversify and add resiliency and
flexibility to our supply chain.
In 2024, our Ideation and New Product Development
teams drove innovation in each of our three business
segments. We launched new, innovative solutions
that are propelling the aftermarket across our
broad category coverage. It   s no secret that the
vehicles we drive today have become more complex
over time, with electronic systems connected to
essentially every function from bumper to bumper.
In anticipation of this continued trend, we   ve made
strategic investments over the last 15 years to build a
differentiated set of capabilities that includes testing
and data logging, proprietary code development, and
software design and validation to expand our portfolio
of complex electronic repair parts and solutions.
With our recently established Electronic Center of
Excellence, our product and engineering teams are
identifying and bringing to market the parts needed to
address failures on next-generation vehicles.
In addition, we remain committed to our capital
deployment strategy to drive long-term growth and
shareholder value for the company. Throughout 2024,
we did just that by further bolstering our balance
sheet. With more $254 million of debt repaid since
the beginning of 2023, we are well-positioned to make
strategic investments that supplement our organic
growth profile. On the mergers and acquisitions
front, we continue to develop relationships with
targeted businesses that can add technological
capabilities, as well as brand and geographic footprint
expansion. These efforts have provided a healthy
pipeline of opportunities, and we   ll look to capitalize
on them as market conditions improve. We   re also
committed to returning capital to our shareholders
through opportunistic share repurchases. In 2024,
we repurchased $78 million of our common stock at
an average price of $91 per share. Additionally, our
Board of Directors authorized a new $500 million
repurchase plan that went into effect at the beginning
of 2025. Overall, we believe that the disciplined nature
and flexibility of our capital allocation strategy will
drive sustainable growth and value for our investors.
Looking forward, we have a positive outlook for 2025
and beyond. The underlying drivers of our success
remain unchanged. We intend to drive new product
development and expand our industry-leading
portfolio of innovative solutions. We   ll continue to
leverage our disciplined operational excellence
capabilities and partner with our suppliers and
customers for mutual success. While uncertainty
exists with trade and macroeconomic dynamics, I   m
confident we have the playbook and proven business
model to navigate the challenges set before us. On
behalf of my fellow Contributors, our management
team, and the Board of Directors, we thank you for
your support and confidence.
Kevin M. Olsen
President & CEO
This letter includes statements that, to the extent they are not recitations of historical fact, constitute forward-looking statements within the meaning of the federal securities laws, and are based on Dorman   s current
expectations and assumptions. Words such as    may,       will,       should,       likely,       probably,       anticipates,       expects,       intends,       plans,       projects,       believes,       views,       estimates,    and similar expressions are used to identify these
forward-looking statements. For a discussion identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, see Dorman   s filings with the US
Securities and Exchange Commission, including, but not limited to,    Risk Factors    in the Form 10-K portion of this Annual Report.
Adjusted Gross Profit, Adjusted Gross Margin, Adjusted Operating Income, Adjusted Operating Income Margin, Adjusted Diluted Earnings Per Share and Free Cash Flow are Non-GAAP financial measures. Reconciliations of
these Non-GAAP financial measures to the most directly comparable GAAP financial measures are included at the end of this Annual Report.
DORMANPRODUCTS.COM

ANNUAL REPORT
THE STORY OF
DORMAN PRODUCTS
Dorman   s story begins with the mass market automobile.
The first moving assembly line was introduced in 1913,
accelerating car manufacturing and making vehicles
more affordable. Early cars offered people the newfound
freedom of mobility. However, to maintain this freedom,
people now needed to maintain their vehicles.
Only a few years later, in 1918, Jack and Lew Dorman, two
enterprising brothers from Cincinnati, discovered that
many people couldn   t find the basic parts they needed to
repair their cars. They started a company named Dorman
Products, selling hard-to-find automotive hardware
sourced from salvaged vehicles.
many of these vintage orange shelves, trays, bins and
display stands are now highly sought-after collector
items.
In 1978, two other brothers, Richard and Steven Berman,
started their own company selling small replacement
parts outside Philadelphia. Seeing that there were
many simple products that people couldn   t buy from
anyone else except original equipment manufacturers,
they founded R&B Inc. to deliver more convenient and
affordable solutions. They became best known under the
brand name Motormite Manufacturing, which launched
many popular product lines like HELP!   and ConductTite  .
The Dormans soon found success manufacturing star
washers, and expanded into selling other hardware, like
brake adjusting screws and center spring bolts. Over
time, the company   s product lines grew to include dozens
of different small part categories, like bearings, caps,
clamps, fittings, hoses and springs.
After competing for decades, Motormite acquired
Dorman in 1994. In 2006, the two companies further
unified under the single Dorman Products brand. Today
the company is publicly listed on the Nasdaq Global
Select Market under the ticker DORM.
Merchandising was where Dorman really made its mark
in the aftermarket. Various assortments and inventory
systems revolutionized the small parts business, and
Dorman is now one of the leading suppliers of
replacement and upgrade parts in the motor vehicle
aftermarket industry, serving passenger cars, light-,
2024 ANNUAL REPORT

2024 ANNUAL REPORT
medium-, and heavy-duty trucks, as well as specialty
vehicles, including utility terrain vehicles and all-terrain
vehicles. Dorman has more than a dozen facilities and
3,787 employees worldwide*. Headquartered in Colmar,
Pennsylvania, Dorman offers more than 138,000 distinct
products.*
As vehicles have evolved, so have we. Far from the early
days of simple components, Dorman now delivers
some of the most advanced replacement parts in the
aftermarket, like ABS modules, electronic throttle
bodies and VVT solenoids. Many of our OE FIX    parts
solve common problems customers have with the OEM
alternative, reducing repair cost and installation time,
and increasing reliability and serviceability.
The original drive of the Dorman and Berman brothers
still guides the company today. Just as both sets of
brothers saw a need to give people better options for
maintaining automobiles, we continue to give repair
professionals and owners greater freedom to fix their
vehicles. Dorman was one of the first companies to
provide these solutions, and we continue to be first to
market with new solutions every day.
Learn more at DormanProducts.com/tour.
*As of December 31, 2024.
SELECTED CONSOLIDATED FINANCIAL DATA
Fiscal Year Ended
($ in thousands, except per share data)
2024
2023
2022
2021
2020
$2,009,197
$1,929,788
$1,733,749
$1,345,249
$1,092,748
4.1%
11.3%
28.9%
23.1%
10.2%
806,359
685,423
564,450
462,916
383,116
40.1%
35.5%
32.6%
34.4%
35.1%
292,909
214,760
171,048
171,551
133,373
14.6%
11.1%
9.9%
12.8%
12.2%
190,004
129,259
121,549
131,532
106,870
Diluted
$6.14
$4.10
$3.85
$4.12
$3.30
Adjusted diluted       
$7.13
$4.54
$4.68
$4.64
$3.45
Cash and cash equivalents
$57,137
$36,814
$46,034
$58,782
$155,576
Outstanding debt under credit
agreement
482,710
577,135
736,238
239,360

Cash provided by operating
activities
231,047
208,758
41,688
100,338
151,966
39,421
43,968
37,883
19,840
15,450
191,626
164,790
3,805
80,498
136,516
(100)
(67)
488,956
345,483
14,808
78,091
15,333
17,577
61,583
36,781
Statement of Operations Data:
Net sales
Sales Growth
Gross profit
Gross profit margin
Income from operations
Operating margin
Net income
Earnings per share:
Balance Sheet and Cash Flow Data:
Capital expenditures

Free cash flow
Cash (provided by) used for
divestitures and acquisitions,
net of cash acquired
Share repurchases under
repurchase program

Non-GAAP measures. See NOTE below.
To help improve comparability, Adjusted Diluted Earnings Per Share for 2022 has been adjusted to remove the 53rd week. No other amounts shown for 2022
have been adjusted to reflect the removal of the 53rd week.
NOTE: For additional information regarding the amounts presented above, see the Form 10-K portion of this Annual Report.
Reconciliations of Adjusted Diluted Earnings Per Share to diluted earnings per share and Free Cash Flow to cash provided by
operating activities are included at the end of this Annual Report.

DORMANPRODUCTS.COM



 4/7/2025 Letter Continued (Full PDF)