DORM

Image source: The Motley Fool. Tuesday, Aug. 4, 2026 at 8:00 a.m. ET Vice President of Investor Relations - Alexander Whitelam Chairman, President, and Chief Executive Officer - Kevin Olsen Chief Financial Officer - Charles Rayfield Operator: Good morning. My name is Nikki, and I will be your conference operator today. At this time, I would like to welcome everyone to the Dorman Products Second Quarter 2026 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I will now turn the call over to Alex Whitelam, Vice President of Investor Relations. Please go ahead. Alexander Whitelam: Thank you. Good morning, everyone. Welcome to Dorman's Second Quarter 2026 Earnings Conference Call. I'm joined by Kevin Olsen, Dorman's Chairman, President and Chief Executive Officer; and Charles Rayfield, Dorman's Chief Financial Officer. Kevin will begin with a high-level overview of the quarter and current business environment, along with our segment level performance and market trends. Charles will walk through our second quarter financial results in more detail, discuss cash flow and capital allocation as well as our updated guidance before turning it back to Kevin for closing remarks. After that, we'll open the call for questions. By now, everyone should have access to our earnings release and earnings call presentation, which are available on our website at investors.dormanproducts.com. Before we begin, I would like to remind everyone that our prepared remarks, earnings release and investor presentation include forward-looking statements within the meaning of federal securities laws. We advise listeners to review the risk factors and cautionary statements in our most recent 10-Q, 10-K and earnings release for important material assumptions, expectations and factors that may cause actual results to differ materially from those anticipated and described in such forward-looking statements. We'll also reference certain non-GAAP measures. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are contained in the schedules attached to our earnings release and in the appendix to this earnings call presentation, both of which can be found on our website. Throughout the presentation, we'll discuss the impact of the IEEPA tariff refunds that we received in the second quarter. I point everyone to the schedule we've included in the appendix of our presentation, which details the refunds' impact on our results. [Operator Instructions] And with that, I'll turn the call over to Kevin. Kevin Olsen: Thanks, Alex, and good morning, everyone. Thank you for joining us today. I'll begin with a brief overview of our second quarter results, spend some time on the current business environment and provide commentary on the performance and key trends we're seeing across our business segments. I'll then turn it over to Charles. Turning to Slide 3. We delivered a strong second quarter with record sales, earnings and robust cash flow generation. Our results were positively impacted by the recovery of IEEPA tariff costs, which Charles will cover in just a moment. We continue to be well positioned to make strategic investments that will allow us to drive medium- to long-term growth. Following recent developments, we believe the tariff landscape has stabilized, which is positive for Dorman and our customers. With an overall lower tariff environment, we began making targeted price reductions in the quarter, which we expect will continue through the back half of the year. Consolidated net sales were $545 million in the second quarter, up approximately 1% compared to the same period last year. Net sales were impacted by the pricing actions I just mentioned, which we started in the quarter. High level, the fundamentals of our industry and our leadership position within the aftermarket remains strong. I'll cover our end markets in the coming slides. Jumping to the bottom line. Adjusted diluted earnings per share for the quarter was a record $3.08, up 50% compared to the second quarter of 2025. Given our performance through the first half of the year and the targeted pricing actions we are taking as a result of a more stable tariff environment, we are updating our full year 2026 guidance. We now expect year-over-year net sales growth of 3% to 5% and adjusted diluted earnings per share to be in the range of $8.50 to $8.80. Charles will walk through the guidance change in more detail in a moment. Turning to Slide 4 and our Light Duty segment. Net sales were flat year-over-year at $424 million as we started reducing pricing with tariff costs coming down. Volume was lower in the quarter, but keep in mind, we were comparing against a strong 10% year-over-year growth in Q2 of 2025. Looking more broadly across our top customers. POS from a total dollars perspective was again up in the mid-single-digit range, which includes inflation embedded in the overall price at the counter. I'd also mention that the Light Duty business has done an excellent job recently capturing business wins in new categories. We expect this will drive increased volume growth in the back half of the year and through 2027. Operating margin expanded 620 basis points year-over-year to 24.7%, driven by refund dynamics. Year-to-date, operating margin was 19.4%, which is more in line with our normalized rate as the IEEPA refund impact was less significant. From an industry perspective, the foundational drivers of the Light Duty aftermarket remain positive. The average age of Light Duty vehicles now sits at 12.9 years, and vehicle miles traveled continue to increase for the quarter and trailing 12-month periods. Overall, these fundamentals support sustained demand for repair and replacement parts over the long haul. In addition to these macro trends, we continue to keep a close eye on our broad end user base. During the quarter, we saw some modest pressure continue on categories that tend to be DIY focused and are relatively discretionary. But keep in mind, this is a smaller portion of our overall portfolio as we skew more to the DIFM customer. And the vast majority of our product portfolio is nondiscretionary in nature. This larger makeup of our portfolio was more stable, and again, POS was consistent in the quarter. Stepping back, our innovation strategy continues to drive significant value for our customers and end users. One recent product launch that highlights this is our new aluminum oil pan for a broad set of Ford F-150s. The original OE part is made with plastic and prone to warping and leaking, creating a well-defined pain point for end users and technicians. Our patented OE fix solution is built from rugged, high-pressure die cast aluminum, delivering a more durable, longer-lasting repair at an attractive aftermarket price. Additionally, we've included a convenient magnet drain plug, which helps prevent harmful metal debris from damaging the engine, and we've designed the plug with an angled mount boss that enables a complete drain. This is exactly the type of product that reinforces Dorman's leadership in aftermarket innovation and I want to congratulate the Light Duty team on another excellent OE fix launch. Turning to Slide 5. In our Heavy Duty segment, net sales increased approximately 7% year-over-year to $66 million, driven by the full year impact of last year's pricing actions, along with business wins in certain categories and channels. Operating margin improved 340 basis points to 4.2%. Excluding the refund benefit, Heavy Duty's comparable operating margin of 2.3% was up 150 basis points on net sales leverage. While the commercialization and infrastructure investments we've made over the last several years position the Heavy Duty segment for long-term growth, they also create an inherent hurdle on the margin front. We expect those investments will help us drive higher volume with an eventual freight market rebound, offset increased costs and allow us to return to our targeted margin profile for the business. On the broader sector, market conditions remain challenged. The great freight recession continued through the second quarter with higher fuel costs and general inflation further weighing on consumer sentiment and freight demand. While freight rates have begun to rebound as fewer fleet operators remain in the market, we do not expect meaningful trucking mileage or tonnage growth in 2026. That said, and as we highlighted on our last call, we continue to see OE dealers increasingly focused on improving revenue and profitability through their service centers with new and used vehicle sales lower year-over-year. Aftermarket partnerships allow these dealers an opportunity to drive improved margin, which is a prime opportunity for us to offer high-quality solutions at aftermarket price points. Needless to say, we're leaning into this channel further. We're also leaning into product and category expansion within our Heavy Duty segment, especially for solutions above the frame. We recently launched a number of newly aftermarket products, including a hydrocarbon injection nozzle that is designed to restore critical dosing functionality within the vehicle's emission system. We've also broadened our fluid reservoir portfolio with the introduction of new power steering and windshield washer reservoirs, providing additional coverage for high population applications. And finally, we introduced 2 new LED headlight assemblies for a broad range of international models. These are 3 great examples where we're diversifying our portfolio and providing more solutions to expand our relationship with fleets across North America. Congrats to the Dayton team for driving innovation across the business. Turning to Slide 6 in our Specialty Vehicles segment. Net sales were down 1% year-over-year to $54 million. Slightly softer customer demand was partially offset by pricing initiatives in certain categories. Consumer sentiment in our specialty vehicle business remains sensitive to macroeconomic conditions, and we believe higher fuel prices, along with broader inflationary pressures weighed on volume during the quarter. Operating margin expanded 880 basis points to 26.1%. Excluding the refund benefit, comparable adjusted operating income margin for Specialty Vehicle was 17.8% in the quarter or 50 basis points above the same period last year, which highlights that the team did a nice job improving their overall margin profile. We're also expanding Super ATV's presence outside the United States, which we believe will support growth over the long term. While this initiative will take some time to materialize, we're encouraged with our trajectory and the opportunities ahead of us. On the broader specialty vehicle market, we continue to see consumer demand shift across the overall sector. Specifically for the second quarter, new vehicle sales continued to increase, but the growth came from 2 different types of vehicles and different consumers. First, more affluent riders are driving growth for cab models, which come with more features pre-installed and typically have lower attachment rates at the dealer. At the same time, we're seeing continued growth in newly launched models that are geared towards entry-level and less affluent riders. As we highlighted on our last call, these models offer significant opportunities for upgrades and repairs. Overall, our large and growing set of solutions allows us to win with all types of riders and vehicles. I'd also mention that ridership remains strong and riders are holding on to their vehicles longer. To that end, we're purposely expanding our portfolio of nondiscretionary repair-oriented solutions for older models still in service, given the elongated repair cycle occurring today. Finally, we're seeing some of the new OEs who have entered the market in recent years continue to launch new models. This broader field of machines provides Super ATV with opportunities to expand their portfolio. One new product that highlights this opportunity well is the Super ATV vented windshield developed for the CFMoto Z10 platform. CFMoto continues to offer riders lower price point vehicles with reputable quality. Recently, CFMoto launched a new sport line with their Z10 platform, and our team was one of the first to market with purpose-built, highly desired upgrade in a vented windshield. The vented design offers comfort, especially in the summer riding months for riders looking for protection from dust and debris in demanding conditions. Speed to market continues to be one of SuperATV's core strengths. Congratulations to the team on another strong product launch. With that, I'll turn it over to Charles to cover our results in more detail. Charles? Charles Rayfield: Thanks, Kevin. Turning to Slide 7. I'll walk through our consolidated financial performance for the second quarter. Total net sales for Q2 were a record at $545 million, up approximately 1% compared to the prior year period. As Kevin noted, top line growth was driven by the Heavy Duty segment, partially offset by lower volume in Light Duty and Specialty Vehicle. Year-to-date, our sales were up 2% compared to the same period in 2025. Adjusted gross margin in the quarter was 46.1%, up 550 basis points compared to last year's second quarter. Excluding the refund benefit, comparable gross margin in the quarter was 38%. Year-to-date, gross margin was 41.1%. Adjusted SG&A expense as a percentage of net sales was 23.8%, down 50 basis points year-over-year. Adjusted operating income in the quarter was $122 million and adjusted operating margin was 22.3%, up 600 basis points compared to the prior year period. Excluding the refund benefit, comparable adjusted operating margin was 14.2%, down 210 basis points from prior year, largely on volume deleverage in Light Duty. Year-to-date, the adjusted operating income margin was more in line with our normalized performance, given the IEEPA refund impact was less significant. Looking forward, we remain focused on driving margin improvements through our supplier diversification, productivity and automation initiatives. Adjusted diluted EPS was $3.08, up 50% year-over-year. The onetime impact of the IEEPA refund contributed approximately $1.18, representing the recovery of IEEPA tariff costs recognized in Q4 2025 and Q1 2026. Excluding this impact, comparable adjusted diluted EPS was $1.90 for the quarter. Again, our year-to-date performance was more in line with our prior year. As mentioned previously, there are some schedules in the appendix section of the investor presentation that outline these impacts. In addition, lower interest expense and a reduction in shares outstanding were also positive contributors to our EPS growth. On Slide 8, operating cash flow for the quarter was $153 million and free cash flow was $144 million. The business did an excellent job driving working capital improvements, which delivered comparable free cash flow of approximately $62 million, exclusive of the IEEPA refund. The strong underlying cash generation and expanded balance sheet capacity provides us with flexibility to reduce costs and deploy capital to drive strategic growth over the medium and long term. On the capital allocation front, we deployed $47 million during the quarter on opportunistic share repurchases and retired approximately 398,000 shares at an average price of approximately $118 per share. Going forward, we have $363 million remaining on our share repurchase authorization, which extends through 2027. Turning to Slide 9. Our balance sheet remains strong. And during the quarter, we further expanded our liquidity position and balance sheet capacity by refinancing our debt instruments. As previously announced in early June, we amended our credit agreement to increase our revolving credit facility from $600 million to $800 million, which extends maturity to 2031. We also used the proceeds from the issuance of $450 million in senior unsecured notes due in 2034 to repay our prior term loan, which was slated to mature in October of 2027. Our financing provides us with substantial capacity to make meaningful investments in our long-term growth strategy. Following the debt refinancing, we ended the quarter with net debt of approximately $318 million and total liquidity of $931 million. Our total net leverage ratio at the end of Q2 was 0.69x our adjusted EBITDA, which positions us extremely well to invest in the business, pursue strategic M&A opportunities and return capital to shareholders through opportunistic share repurchases. Turning to Slide 10. As Kevin mentioned, we are updating our full year 2026 guidance. I'd also point you to our schedules in the appendix that cover our guidance in more detail, which include reconciliations of the comparable figures discussed today. On the top line, we now expect a net sales growth of 3% to 5% compared to our prior guidance of 7% to 9%. The reduction reflects our performance in the first half of the year and the targeted pricing actions we are taking as a result of a more stable tariff environment. On the bottom line, we now expect total adjusted diluted EPS to be in the range of $8.50 to $8.80, up from our prior range of $8.10 to $8.50. The increase to our guidance range is primarily due to the onetime refund benefit of approximately $0.30. This represents the recovery of IEEPA tariff costs recognized in the fourth quarter of 2025. Excluding this benefit, our comparable adjusted diluted EPS range is $8.20 to $8.50. The midpoint of this range of $8.35 is up 10% over last year's comparable base of $7.62 and up 17% on a 2-year stack. Let me also provide some additional color on the remainder of the year, which we believe provides a strong foundation for 2027 and beyond. For net sales, we expect our second half growth rate to be in the mid-single-digit range compared to the same period in 2025. This growth will largely be volume driven from the new business wins that Kevin mentioned earlier. Across the segments, we expect Light Duty to be in this range with Heavy Duty slightly above and Specialty Vehicles slightly below. On the margin front, we're now targeting a full year adjusted operating income margin of approximately 15.5% to 16.5%, up from our previous expectations of 15% to 16%. Given the timing dynamics around our pricing actions, we now expect gross margins to exit the year at a more normalized rate of approximately 40%. And finally, we expect adjusted diluted EPS for the back half of 2026 to be in the range of $3.85 to $4.15 up 9% to 17% over the comparable second half adjusted diluted EPS of $3.54 in 2025. Again, barring any unforeseen market challenges, we expect these rates to serve as a structural base to grow from in 2027. With that, I'll now turn the call back over to Kevin to conclude. Kevin? Kevin Olsen: Thanks, Charles. Let me close by reinforcing a few points. First, we're pleased with our second quarter results, which included record earnings and exceptionally strong cash generation. More importantly, our long-term outlook remains unchanged. The structural drivers of the aftermarket demand, growing vehicle age, rising vehicle miles traveled and the largely nondiscretionary nature of our portfolio remain firmly in place. In addition to the stabilizing tariff environment, we believe our diversified supplier network, our innovation engine and the strength of our balance sheet position us well for the future. We appreciate your continued interest and support. And with that, we'll open the call up for questions. Operator: [Operator Instructions] We will take our first question from Scott Stember with ROTH. Scott Stember: Maybe we could take a step back and just talk about the price reductions that are going to your customers. So just maybe give a little sense of -- is it just related to the IEEPA refund that you received? And also, you talked about this continuing through the end of this year. Is this a transitory type of thing just to address the IEEPA benefit that you got? And just trying to get a sense of for '27, how we should be thinking about pricing, whether we go back to a normalized range? Kevin Olsen: Good question, Scott. It's Kevin. Just let me high level talk a little bit about the tariffs. I'll kind of walk back to 2018, '19. Our tariff philosophy has always been to treat this as a pass-through cost. Whether that's going up, we mitigate what we can, we pass along the balance. And vice versa, if tariff costs come down, we pass those back to our customers. We have kind of always taken that approach. When it comes to IEEPA, when we got into the second quarter, refunds started being issued to us for the IEEPA refund, and it became clear that the replacement tariff was going to be a Section 301 tariff. And just as a reminder, Section 301 tariffs have been with us for a very long time back to 2018 and 2019. So we're very familiar with that tariff. The difference being IEEPA was what we would consider a stacking tariff. So a large portion of our portfolio is subject to 232 tariffs, which are the auto part tariff and the steel and aluminum tariff. IEEPA stacked on top of that. Section 301 is different, whereas if a part is subject to 232, it doesn't apply. So when we step back, that for us meant a much lower tariff environment going forward. So in the second quarter, we started to reduce pricing. To your question as to -- it's a onetime kind of price reduction to reflect the ongoing tariff costs. We still have tariffs in the business, Section 232, and there is a component of the business that is subject to Section 301. The pricing will remain in place for those tariffs, but not for IEEPA, which allowed us to reduce pricing. So I think if you kind of go back to the prepared comments, as you think about 2027, as Charles mentioned, the financial profile of the business as we move through the back half of the year will be much more normalized than what you're all used to. And in terms of growth, as we look at the back half of the year, if you take kind of the implied guidance that we put out there for the full year of 3% to 5% growth in a lower price environment, that would imply that unit growth will be fairly strong in the back half of the year. And that's being driven by new business wins that we've talked about in the past that we kind of won late last year, early this year that will come online here in the back half and new product launches, which continue to be very strong. So that will continue through 2027. I hope that answers your question. Scott Stember: [indiscernible] And just a quick follow-up before I jump back into the queue. You -- if you look at DIY versus DIFM, you did talk about -- this is the first time you probably mentioned that you DIY product is seeing a little bit more softness. Is there an accelerating trend there? Or is there anything that we should be concerned about going forward on that front? Kevin Olsen: Yes. Another good question, Scott. I'd first kind of take you back to our overall POS rates going back at least 3 quarters now have been relatively stable. So I don't think anything that we're seeing is an accelerating trend. But certainly, I would say that the DIFM channel has been more resilient as our consumer, the owner of a 13-year-old vehicle, our view is they are under pressure with all the inflationary aspects going on in the economy right now. But that's been in place now for quite some time. And when you look -- when you step back and look at our portfolio, the vast majority, as we've said before, is nondiscretionary. For the most part, your car isn't running or isn't running safely for most of our [ hard part ] repairs. Operator: Our next question comes from Jeff Lick with Stephens. Jeffrey Lick: Congrats on a nice quarter managing a pretty dynamic environment here. Kevin, just kind of building on some of Scott's things, I was wondering if the 3% to 5% growth versus the 7% to 9% prior, I was wondering if you'd be -- obviously, the 7% to 9% was based on a pricing structure that doesn't exist. So I'm just kind of curious on an apples-to-apples basis, if you'd give any color as to what changed there, if at all? And then as it relates to the lower pricing, obviously, that's good in terms of elasticity. How long do you think that might take where you might actually see some benefits in things like DIY because you do have lower prices throughout the chain throughout the ecosystem now. Charles Rayfield: Yes. Thanks, Jeff. This is Charles. Maybe I'll start with the first part of your question. So to your point, we took the guide down from 7% to 9% to 3% to 5% for the full year. That reduction reflects a couple of things. One, the performance in the first half, that includes some lower volume. And as Kevin mentioned, some pricing reductions that we just discussed in response to some of the tariff environment coming down. Secondly, it's reflective of pricing reductions that we're expecting to take through the back half of the year. Again, that's a response to the reduction in tariff costs that we've seen as those costs are largely passed through. So we're guiding second half sales growth to the mid-single-digit range, which is largely volume driven from the new business wins that Kevin mentioned earlier as well as new product introductions. Kevin Olsen: In terms -- Jeff, it's Kevin. In terms of the elasticity question, look, I mean, obviously, our hope would be that prices do come down for our ultimate end user, the guy hanging the parts on the vehicle and the person that needs the vehicle repaired so they can get to work every day. But ultimately, you need to understand we don't control that, right? We set pricing to our customers who then control end user pricing. So we don't control that. However, hypothetically, if pricing does come down in the market at the end user level, we do expect an uptick. I mean there are certain categories and parts that are more discretionary in nature that will be more elastic. But for the most part, the vast majority of our portfolio is what we would consider inelastic, Jeff. And just another point there. You talked a little bit about the guide. I'll just add on to what Charles said. I mean we continue to kind of see mid-single-digit POS for the portfolio. And as we think about the back half, we don't anticipate that changing in terms of the overall business environment. However, our unit growth will be aided by the things that we mentioned with new business wins and new product launches. Jeffrey Lick: And then just a quick follow-up here. You haven't mentioned yet, but any updates on the large customer that was kind of retrenching and how that -- is that kind of out of the system now? And how is that going? Kevin Olsen: Yes, that's become more normalized. I believe that was back in the fourth quarter, Jeff, and we've seen more normalized kind of order rates in comparison to sellout. Operator: We will move next with David Lantz with Wells Fargo. David Lantz: So curious if we can just dive into gross margin in a little more detail and talk about some of the Q3 and Q4 puts and takes. And then just one clarification. You mentioned the 40% exit rate for gross margins. Just want to confirm that, that's a Q4 comment as opposed to [ '26 ]? Charles Rayfield: Yes, sure. So David, thanks for the question. So I'll take that one. So yes, so on a comparable basis, excluding the refund for the second quarter, gross margins were 38%. Kevin talked a little bit about some of the tariff environment here. As we talked about in the previous quarters, we expected Q1 to be the highest tariff load we had. We expect it to start coming down in Q2, which we saw. And so we're seeing much more normalized rates. There are still tariffs in the business, but at lower levels as we go through the back part of the year. So he talked about exiting the year, and Kevin mentioned exiting the year at 40%, that's a fourth quarter comment. We think that's a structural rate as we exit the year and enter into 2027. And so we feel pretty positive about that aspect. David Lantz: Got it. That's helpful. And then just on the SG&A front, 50 basis points of leverage in the quarter is really strong. So curious if we can talk through kind of assumptions for the back half in light of the mid-single-digit top line expectation? Charles Rayfield: Yes. So good question. So yes, we had some good operational leverage in SG&A as we came through the second quarter. I think as we look through the back half of the year with the sales guide that we gave, there's likely to be a little bit of SG&A deleverage, but not a meaningful change in dollar spend. So I think dollars are relatively consistent and that will normalize as we go into 2027, but likely to see some deleverage in the back part of the year. Operator: We will move next with Bret Jordan with Jefferies. Bret Jordan: The $82 million in free cash contribution from the tariff refund, do your customers ask you for outright cash back on your refunds? Or can you make it up just on pricing as you sort of get through the lower [indiscernible] rates? Kevin Olsen: Yes. Good question, Bret. I mean we don't disclose specific commercial actions or agreements with any specific customers. As you know, we continue to partner closely with all of our customers. But I will say that beginning in Q2 and through the second half, we're going to have lower pricing on a go-forward basis to match the current tariff environment. And it's going to -- definitely provides us more certainty. Hopefully, we see less of the tariff changes on a day-to-day, week-to-week basis that we've seen, and that's all baked into the guide. I'm not going to talk specifically about specific customer agreements. Bret Jordan: And then on M&A, obviously, the balance sheet is pretty well liquid and operations on the core business being pretty solid. What are you thinking? I mean, is there M&A activity sort of heating up? Is that more interesting to you? And sort of what scope would you be considering in the current environment? Kevin Olsen: Yes. Good question, Bret. I'd say we're definitely seeing more pipeline activity now than we've seen in the last few years. I think a couple of reasons. I think the tariff environment being a little bit more stable at this point has definitely contributed to that. Interest rates seem to have settled in as well. It seems also that potential sellers have kind of reset with more rational valuations. So we view that as a favorable going forward. So ultimately, our M&A strategy has not changed in terms of how we think about it across the portfolio, and it continues to be a pretty big piece of our capital allocation strategy. Operator: Our next question comes from Tristan Thomas-Martin with BMO Capital Markets. Tristan Thomas-Martin: Thanks for all the tariff kind of appendixes discussed in the press release. Maybe just at a high level, can you kind of go through the kind of the moving pieces of how the $1.18 tariff refund benefit in the quarter translates to a $0.30 kind of cap on the increase on guidance? Charles Rayfield: Yes. Good question, Tristan. This is Charles. I'll take that one. So I think the best way to think about the $1.18 is those are -- that's related to refunds we received for charges that we took prior to Q2 of 2026. So as Kevin talked about in some of the earlier comments, began paying tariffs throughout 2025. We capitalized a lot of those costs in inventory, started to see that flow through the P&L in the very back part of 2025 and into 2026. As we talked about previously, we saw some of the heavier loads come through in the first quarter. So that $1.18 is attempting to back out the prior period components. And so all that remains in Q2 is a more comparable cost basis. And then the $0.30 is related to the time period before 2026. That's really related to the fourth quarter of 2025 and the costs that were incurred in that time period. Tristan Thomas-Martin: Okay. And then just 2 more quick ones. For Light Duty, when you called out lower volume, does that mean down year-over-year or a deceleration from prior quarters? Kevin Olsen: No, I think -- Tristan, it's Kevin. I think how you need to think about that is we've been talking about this for quite some time that the first half was going to be a difficult comp, remained steady in the mid-single-digit range. But last year, we had 10% growth in Light Duty and so we had a shipment dynamic last year that was just strong, and we knew that was going to ease as we moved into the back half. It's actually, as we mentioned in the prepared remarks that Q2 is actually a high watermark for us from a total shipment standpoint. It's tough comp. Tristan Thomas-Martin: Okay. And then just one more on Specialty Vehicles. I kind of get the high-end dynamic, but I'm just curious what you're seeing with attach rates at some of these new entry-level products the OEMs are setting up? Kevin Olsen: Well, we're seeing on the -- I mean -- I mean, without risk of stating the obvious, I mean, we're seeing more attach rate with the lower-end machines. Obviously, they're more decontented, and we're seeing a lower attach rate with the higher-end machines. And I think -- so it's a pretty broad spectrum out there right now. I think the high-end consumer continues to purchase higher-level machines that come with full enclosures and more accessories. But the lower-end consumer, it's why you're seeing, I think, a lot of new entrants come in with Segway and CFMoto and they're making a lot of noise early on, which obviously is a good dynamic for us over the long term as we believe price points will make their way back down over time to address that lower-end segment. But we have a broad portfolio, as you know, to address a wide spectrum of vehicles, whether it's high end or lower end. Operator: We will move next with [ Justin Ages ] with [ CJS Securities ]. Unknown Analyst: This is Ron for Justin. Could you please elaborate on some of the Heavy Duty wins that you noted in the quarter? And then are you seeing any indications of things beginning to improve in Heavy Duty in general? Kevin Olsen: Yes. Good question. I'd say we highlighted some new products there and some wins that has really been our focus, and we're starting to get traction. It's really above the frame. I mean we're very, very strong below the frame in the undercarriage of the commercial vehicle. And a large part of our strategy has been to really penetrate the above frame market, which we're starting to successfully do, and we're starting to see that in the results. I would say just in terms of the overall market, I mean, freight rates, I think we've all read in the news that are starting to rebound, which is a good thing. But I would say that the -- there is no forecasted or meaningful forecast increase for either mileage driven or tonnage for 2026. So we continue to remain focused on what we can control, which is become a better, more productive operator and to continue to really prime the flywheel of new products and above frame. And as we also mentioned in the prepared remarks, attacking new channels where we're not very penetrated today. So the opportunity, as we view it is large and it's bright. Operator: This concludes our Q&A session and today's conference call. Thank you for your participation. You may now disconnect. Before you buy stock in Dorman Products, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Dorman Products wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Dorman Products (DORM) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Record second quarter earnings were significantly bolstered by the recovery of IEEPA tariff costs, totaling a $1.18 per share benefit. Management believes the tariff landscape has stabilized following the shift from IEEPA to Section 301 tariffs, which do not stack on existing 232 duties. Light Duty net sales remained flat as the company initiated targeted price reductions to pass through lower tariff costs to customers, offsetting volume pressure from a difficult 10% prior-year comparison. Heavy Duty growth of 7% was driven by the full-year impact of previous pricing actions and strategic expansion into 'above the frame' product categories. Specialty Vehicle performance reflected a shift in consumer demand, where affluent riders are purchasing pre-accessorized cab models, while entry-level riders drive demand for aftermarket upgrades. The company maintains that the vast majority of its portfolio is nondiscretionary, providing a stable demand base despite inflationary pressures on DIY-focused consumers. Full-year 2026 net sales growth guidance was revised downward to 3% to 5% to reflect the impact of ongoing price reductions resulting from the lower tariff environment. Management expects mid-single-digit sales growth in the second half of the year, primarily driven by volume from new business wins secured in late 2025 and early 2026. Gross margins are projected to exit the year at a normalized structural rate of approximately 40% as pricing actions and tariff costs align. The company anticipates a return to targeted margin profiles in the Heavy Duty segment as infrastructure investments leverage an eventual freight market rebound. Strategic M&A activity is expected to increase as management observes a more active pipeline and more rational valuations from potential sellers. The IEEPA refund provided a one-time $0.30 benefit to the updated full-year EPS guidance, representing the recovery of costs recognized in Q4 2025. A debt refinancing in June increased the revolving credit facility to $800 million and extended maturities to 2031 and 2034, enhancing capital allocation flexibility. The 'great freight recession' continues to challenge the Heavy Duty sector, with no meaningful growth in trucking mileage or tonnage expected for the remainder of 2026. Ongoing targeted price reductions are expected to continue through the back half of the year as the company maintains its 'pass-through' philosophy for tariff costs. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management clarified that price reductions are a permanent adjustment to the lower Section 301 tariff environment rather than a transitory rebate. The financial profile is expected to be 'normalized' by the end of 2026, serving as a structural base for growth in 2027. While Dorman reduces prices to direct customers, they do not control the final price at the retail counter. Management expects some volume uptick in discretionary categories if retail prices fall, but notes the core portfolio remains largely inelastic due to its nondiscretionary nature. Pipeline activity has increased due to a more stable tariff environment and sellers resetting valuation expectations. M&A remains a primary pillar of the capital allocation strategy alongside opportunistic share repurchases.

This article first appeared on GuruFocus. Release Date: August 04, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Dorman Products Inc (NASDAQ:DORM) delivered record second-quarter sales of $545 million and record adjusted diluted EPS of $3.08, up 50% year over year. The company received a one-time IEPA tariff refund of $1.18 per share, which significantly boosted quarterly profitability and cash flow. Dorman Products Inc (NASDAQ:DORM) generated robust free cash flow of $144 million in the quarter, driven by strong working capital improvements. The company strengthened its balance sheet by refinancing debt, increasing its revolving credit facility to $800 million, and extending maturities to 2031 and 2034. Dorman Products Inc (NASDAQ:DORM) continues to innovate with new product launches, such as the aluminum oil pan for Ford F-150s and heavy-duty emission components, which are expected to drive volume growth in the second half of 2026. The tariff landscape has stabilized, with a lower overall tariff environment, allowing the company to make targeted price reductions and improve certainty for customers. Dorman Products Inc (NASDAQ:DORM) lowered its full-year 2026 net sales growth guidance from 7-9% to 3-5%, reflecting weaker first-half volume and targeted price reductions. Light duty segment net sales were flat year over year at $424 million, with lower volumes compared to a strong 10% growth in Q2 2025. The company continues to see modest pressure on discretionary DIY-focused categories, as consumers face inflationary headwinds. Heavy duty segment margins remain challenged, with a comparable operating margin of only 2.3% (excluding refunds), due to ongoing freight recession and investment costs. Specialty vehicle segment net sales declined 1% year over year to $54 million, as higher fuel prices and inflation weighed on consumer demand. The company expects gross margins to exit the year at a normalized rate of approximately 40%, down from the elevated levels seen in the first half due to tariff refunds. Warning! GuruFocus has detected 8 Warning Sign with SGC. Is DORM fairly valued? Test your thesis with our free DCF calculator. Q: Can you elaborate on the price reductions being passed to customers, whether they are related to the IEPA refund, and how we should think about pricing for 2027?A: Kevin Olson (Chairman, President and CEO) explained that Dorman's tariff philosophy is to treat tariffs as a pass-through cost. With the IEPA refunds issued in Q2 and the replacement being Section 301 tariffs (which do not stack on top of 232 tariffs like IEPA did), the overall tariff environment is lower. The company began targeted price reductions in Q2 to reflect this ongoing lower cost structure, and these will continue through the back half of the year. The pricing reductions are a one-time adjustment to match the new tariff reality, not a transitory promotional action. For 2027, the financial profile will be more normalized, with growth driven by unit volume from new business wins and product launches rather than pricing. Q: Can you break down the change in full-year guidance from 7-9% growth to 3-5%, and how long will it take to see benefits from lower pricing on elasticity?A: Charles Rayfield (CFO) stated the guidance reduction reflects first-half performance (lower volume) and the expected pricing reductions in the back half due to the lower tariff environment. The second-half sales growth is guided to the mid-single-digit range, which is largely volume-driven from new business wins and product launches. Kevin Olson added that while Dorman doesn't control end-user pricing, if lower prices do reach the consumer, they expect an uptick in demand, particularly in more discretionary categories, though the vast majority of the portfolio is inelastic. Q: Can you provide more detail on the gross margin puts and takes for Q3 and Q4, and confirm the 40% exit rate is a Q4 comment?A: Charles Rayfield confirmed that the 40% gross margin exit rate is a Q4 2026 comment. He explained that Q1 2026 had the heaviest tariff load, which began to ease in Q2. As the company moves through the back half of the year, tariffs remain in the business but at lower levels. The 40% exit rate is considered a structural rate as the company enters 2027, which they feel positive about. Q: Regarding the $1.18 tariff refund benefit in the quarter, how does that translate to only a $0.30 increase in full-year guidance?A: Charles Rayfield clarified that the $1.18 per share benefit in Q2 includes refunds for tariffs recognized in prior periods (Q4 2025 and Q1 2026). The $0.30 increase to full-year guidance only relates to the portion of the refund attributable to costs incurred before 2026, specifically Q4 2025. The rest of the refund offsets the higher tariff costs that were already recognized in the first half of 2026, so it doesn't add to the full-year total. Q: For light duty, does "lower volume" mean down year-over-year or just a deceleration from prior quarters?A: Kevin Olson explained that the lower volume is a deceleration against a very difficult comparison. In Q2 2025, light duty grew 10% year-over-year, which was a high-water mark for shipments. Point-of-sale (POS) has remained steady in the mid-single-digit range, but the shipment dynamic from last year was exceptionally strong and was expected to ease in the back half of 2026. Q: What are you seeing in terms of attach rates for new entry-level products in the specialty vehicle segment?A: Kevin Olson noted that attach rates are higher for lower-end, decontented machines and lower for higher-end machines that come with more features pre-installed. The high-end consumer continues to purchase fully accessorized vehicles, while new entrants like Segway and CFMoto are driving growth in the entry-level segment. This dynamic is positive for Super ATV long-term as it provides opportunities for upgrades and repairs on a broader field of machines. Q: Can you elaborate on the heavy-duty segment wins and whether you're seeing any indications of improvement in the broader market?A: Kevin Olson highlighted that the heavy-duty segment is gaining traction in the "above the frame" market, which is a key strategic focus. While freight rates are beginning to rebound, there is no meaningful forecast for mileage or tonnage growth in 2026. The company remains focused on what it can control: new product launches, penetrating new channels, and improving operational productivity. The OE dealer channel is also becoming a prime opportunity as dealers look to improve service center profitability. Q: With the strong balance sheet and liquidity, what is the M&A environment looking like, and what scope of deals are you considering?A: Kevin Olson stated that M&A pipeline activity has increased compared to the last few years, driven by a more stable tariff environment, settled interest rates, and sellers resetting to more rational valuations. The M&A strategy remains unchanged and continues to be a significant part of the capital allocation strategy, with the balance sheet well-positioned to pursue strategic opportunities. Q: Do customers ask for outright cash back related to the tariff refund, or is it just lower go-forward pricing?A: Kevin Olson declined to disclose specific commercial agreements but confirmed that the company is providing lower go-forward pricing to match the current tariff environment. This approach provides more certainty for both Dorman and its customers, and all of these dynamics are baked into the updated guidance. Q: Can you discuss the SG&A leverage in the quarter and assumptions for the back half of the year?A: Charles Rayfield noted that the company experienced good operational leverage in SG&A during Q2. For the back half of the year, with the mid-single-digit sales growth guidance, there is likely to be a little SG&A deleverage, but dollar spend is expected to remain relatively consistent. This should normalize as the company moves into 2027. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Interested in Dorman Products, Inc.? Here are five stocks we like better. Record Q2 results: Net sales rose about 1% to $545 million, while adjusted EPS increased 50% to $3.08. Results benefited from a $1.18-per-share IEEPA tariff refund; comparable EPS excluding the refund was $1.90. Guidance shifted due to lower pricing: Dorman cut its 2026 sales-growth outlook to 3%–5% from 7%–9% as tariff-related price reductions continue, but raised adjusted EPS guidance to $8.50–$8.80, including the tariff-refund benefit. Segment performance was mixed: Heavy Duty sales grew 7%, while Light Duty sales were flat and Specialty Vehicle sales fell 1%. The company maintained strong liquidity, repurchased $47 million of stock, and ended the quarter with $318 million in net debt. Dorman Products Is A Buy For Small-Cap Growth Investors Dorman Products (NASDAQ:DORM) reported record second-quarter sales, earnings and cash flow for 2026, while lowering its full-year revenue growth outlook to reflect reduced pricing tied to a more stable tariff environment. Second-quarter net sales rose about 1% from a year earlier to a record $545 million. Adjusted diluted earnings per share increased 50% to a record $3.08, though results included a one-time benefit from refunds of tariffs assessed under the International Emergency Economic Powers Act, or IEEPA. → SpaceX’s First Earnings Report Could Decide Whether Shorts or Bulls Have Control It’s Time To Hitch A Ride With Dorman Products Stock Chairman, President and Chief Executive Officer Kevin Olsen said the company began targeted price reductions during the quarter as tariff costs declined. Dorman expects the reductions to continue through the second half of the year. “Our tariff philosophy has always been to treat this as a pass-through cost,” Olsen said during the call. He said the replacement of IEEPA tariffs with Section 301 tariffs created a lower ongoing tariff environment for much of the company’s portfolio, particularly because Section 301 tariffs do not stack on top of Section 232 auto-parts and steel-and-aluminum tariffs in the same way. → Financials Hit Record Highs as the AI Trade Unravels—Can They Keep Leading? Dorman now expects 2026 net sales growth of 3% to 5%, compared with its previous outlook for 7% to 9% growth. Chief Financial Officer Charles Rayfield said the revised forecast reflects first-half performance, including lower volume in certain businesses, as well as pricing reductions expected through the remainder of the year. The company raised its full-year adjusted diluted EPS outlook to a range of $8.50 to $8.80, from prior guidance of $8.10 to $8.50. The increase primarily reflects an approximately $0.30 benefit related to the recovery of IEEPA tariff costs recognized in the fourth quarter of 2025. → Why Rare Earth Processing Could Be the Real 2027 Opportunity Excluding that benefit, Dorman expects comparable adjusted diluted EPS of $8.20 to $8.50. Rayfield said the midpoint of that range would represent 10% growth over the company’s 2025 comparable base. For the second half, Dorman expects sales growth in the mid-single-digit range, driven largely by volume from new business wins and product introductions. The company expects Light Duty sales to grow in that range, Heavy Duty sales to grow slightly faster, and Specialty Vehicle sales to grow slightly slower. Dorman expects full-year adjusted operating margin of approximately 15.5% to 16.5%, compared with its prior outlook of 15% to 16%. Rayfield said gross margin is expected to exit the year at a more normalized rate of about 40% in the fourth quarter. Adjusted gross margin reached 46.1% in the second quarter, up 550 basis points from a year earlier. Excluding the tariff-refund benefit, comparable gross margin was 38%. Adjusted operating income was $122 million, and adjusted operating margin was 22.3%, up 600 basis points year over year. Excluding the refund benefit, comparable adjusted operating margin was 14.2%, down 210 basis points from the prior-year period, which Rayfield attributed largely to volume deleverage in the Light Duty segment. The IEEPA tariff refund added about $1.18 to second-quarter adjusted diluted EPS, representing recovery of tariff costs recognized during the fourth quarter of 2025 and the first quarter of 2026. Excluding the refund, comparable adjusted EPS was $1.90 for the quarter. Operating cash flow totaled $153 million, while free cash flow was $144 million. Excluding the IEEPA refund, Dorman generated approximately $62 million in comparable free cash flow, aided by working-capital improvements. The company spent $47 million on share repurchases during the quarter, retiring about 398,000 shares at an average price of roughly $118 per share. Dorman had $363 million remaining under its repurchase authorization, which runs through 2027. Dorman also refinanced its debt during the quarter, expanding its revolving credit facility to $800 million from $600 million and extending its maturity to 2031. The company issued $450 million of senior unsecured notes due in 2034 and used the proceeds to repay a prior term loan. It ended the quarter with approximately $318 million of net debt, $931 million of total liquidity and net leverage of 0.69 times adjusted EBITDA. Light Duty sales were flat at $424 million, as lower pricing offset other factors and volume declined against a strong comparison in the prior-year quarter. Olsen noted that Light Duty had posted 10% year-over-year growth in the second quarter of 2025. Point-of-sale dollars among top customers remained up in the mid-single-digit range, he said. The company continued to see modest pressure in relatively discretionary, do-it-yourself-oriented categories, though Olsen said those products represent a smaller part of Dorman’s portfolio. The larger, predominantly non-discretionary do-it-for-me portion of the business was more stable. Dorman cited the average light-duty vehicle age of 12.9 years and rising vehicle miles traveled as supportive of long-term replacement-part demand. Heavy Duty sales increased about 7% to $66 million, helped by the full-year effect of prior pricing actions and business wins in certain categories and channels. The segment’s operating margin rose to 4.2%; excluding the refund benefit, comparable margin was 2.3%, up 150 basis points. Olsen said freight-market conditions remain difficult and Dorman does not expect meaningful growth in trucking mileage or tonnage during 2026. However, the company is pursuing opportunities with original-equipment dealers seeking additional service-center revenue and is expanding its above-frame product offerings. Specialty Vehicle sales declined 1% to $54 million as softer customer demand was partly offset by pricing initiatives. Excluding the tariff-refund benefit, comparable adjusted operating margin was 17.8%, up 50 basis points year over year. Dorman said higher fuel prices and inflation weighed on consumer demand, while sales of both high-end cab models and lower-priced entry-level vehicles created different accessory and repair opportunities. Olsen said the company remains focused on product innovation, supplier diversification, automation and productivity initiatives, while its balance sheet provides capacity for investments, acquisitions and additional share repurchases. Dorman Products, Inc is a leading independent global supplier of automotive aftermarket parts and hardware. Headquartered in Colmar, Pennsylvania, the company specializes in the design, manufacture and distribution of replacement components for passenger cars, light trucks and commercial vehicles. Dorman's offerings span both mechanical and electrical systems, providing solutions that help repair shops and retailers address wear-out and collision-related failures on domestic and import vehicles. The company's extensive product portfolio includes steering and suspension components, brake system parts, engine management and cooling products, exterior and body hardware, and an array of fasteners, clips and brackets. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Dorman Products Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Highlights (All comparisons are to the prior year period unless otherwise noted): Net sales of $544.6 million for the quarter, up 0.7% Diluted earnings per share (“EPS”) of $2.93, up 53%, and adjusted diluted EPS* of $3.08, up 50% Generated $152.6 million of cash from operating activities; repurchased $47 million of shares Earnings and cash from operating activities benefited from IEEPA tariff cost recovery* Updates its full-year guidance for 2026 COLMAR, Pa., Aug. 03, 2026 (GLOBE NEWSWIRE) -- Dorman Products, Inc. (the “Company” or “Dorman”) (NASDAQ: DORM), a leading supplier in the motor vehicle aftermarket industry, today announced its financial results for the second quarter ended June 27, 2026. Kevin Olsen, Dorman’s Chairman, President, and Chief Executive Officer, stated, “Our second quarter results included record earnings and strong cash flow generation, reflecting both solid operating performance and the recovery of IEEPA tariff costs recognized in prior periods. Year-over-year, net sales for the quarter increased 1% to $545 million, diluted EPS increased 53% to $2.93, and adjusted diluted EPS increased 50% to $3.08. In addition, we generated $153 million of operating cash flow in the quarter and returned capital to shareholders through $47 million of share repurchases. We believe our cash flow generation positions the company well to make strategic investments and drive long-term growth. “Given our performance through the first half of the year and targeted pricing actions we are taking as a result of a more stable tariff environment, we are updating our full-year 2026 guidance. We now expect net sales growth of 3% to 5%, diluted EPS in the range of $7.93 to $8.23, and adjusted diluted EPS in the range of $8.50 to $8.80. “Supported by our strengthened balance sheet, expanded liquidity from our recent debt refinancing, and the strategic advantages of our diversified supplier network and innovation engine, we remain confident in our ability to deliver differentiated solutions for our customers and strong value for our shareholders.” Second Quarter Financial ResultsThe Company reported second quarter 2026 net sales of $544.6 million, up 0.7% compared to net sales of $541.0 million in the second quarter of 2025. Gross profit was $251.2 million in the second quarter of 2026, or 46.1% of net sales, compared to $219.5 million, or 40.6% of net sales, in the same quarter last year. Selling, general, and administrative (“SG&A”) expenses were $135.0 million, or 24.8% of net sales, in the second quarter of 2026, compared to $137.0 million, or 25.3% of net sales, in the same quarter last year. Adjusted SG&A expenses* were $129.6 million, or 23.8% of net sales, in the second quarter of 2026, compared to $131.3 million, or 24.3% of net sales, in the same quarter last year. Diluted EPS was $2.93 in the second quarter of 2026, up 53% compared to diluted EPS of $1.91 in the same quarter last year. Adjusted diluted EPS* was $3.08 in the second quarter of 2026, up 50% compared to adjusted diluted EPS* of $2.06 in the same quarter last year. Segment results were as follows: 2026 GuidanceThe Company updates its full-year 2026 guidance as detailed in the table below. The Company's guidance includes the expected impact of tariffs enacted as of August 3, 2026. The Company’s guidance excludes the impact of potential tariff changes after August 3, 2026, future acquisitions and divestitures, and additional share repurchases. Conference Call and WebcastThe Company will hold a conference call and webcast for investors on Tuesday, August 4, 2026, beginning at 8:00 a.m. Eastern Time. The conference call can be accessed by telephone at (800) 420-1459 within the U.S. or +1 (203) 518-9861 outside the U.S. When prompted, enter the conference ID “DORMQ226”. A live audio webcast and accompanying presentation materials can be accessed on the Company’s website at investors.dormanproducts.com. A replay of the webcast will be made available on the website shortly after the conclusion of the call. About Dorman ProductsDorman gives professionals, enthusiasts, and owners greater freedom to fix motor vehicles. For over 100 years, we have been driving new solutions, releasing tens of thousands of aftermarket replacement products engineered to save time and money and increase convenience and reliability. Founded and headquartered in the United States, we are a pioneering global organization offering an always-evolving catalog of products covering cars, trucks, and specialty vehicles, from chassis to body, from underhood to undercarriage, and from hardware to complex electronics. *Non-GAAP MeasuresIn addition to the financial measures prepared in accordance with generally accepted accounting principles (GAAP), this earnings release also contains Non-GAAP financial measures. The reasons why we believe these measures provide useful information to investors, a reconciliation of these measures to the most directly comparable GAAP measures, and other information relating to these Non-GAAP measures are included in the supplemental schedules attached. These schedules also include a reconciliation detailing the impact of IEEPA tariff recoveries on our results. Forward-Looking StatementsThis press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. 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. Readers are cautioned not to place undue reliance on those forward-looking statements, which speak only as of the date such statements were made. Such forward-looking statements are based on current expectations that involve known and unknown risks, uncertainties, and other factors (many of which are outside of our control). Such risks, uncertainties and other factors relate to, among other things: competition in and the evolution of the motor vehicle aftermarket industry; changes in our relationships with, or the loss of, any customers or suppliers; our ability to develop, market and sell new and existing products; our ability to anticipate and meet customer demand; our ability to purchase necessary materials from our suppliers and the impacts of any related logistics constraints; widespread public health pandemics; political and regulatory matters, such as changes in trade policy, the imposition of tariffs and climate regulation; our ability to protect our information security systems and defend against cyberattacks; our ability to protect our intellectual property and defend against any claims of infringement; and financial and economic factors, such as our level of indebtedness, fluctuations in interest rates and inflation. More information on these risks and other potential factors that could affect the Company’s business, reputation, results of operations, financial condition, and stock price is included in the Company’s filings with the Securities and Exchange Commission (“SEC”), including in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s most recently filed periodic reports on Form 10-K and Form 10-Q and subsequent filings. The Company is under no obligation to, and expressly disclaims any such obligation to, update any of the information in this document, including but not limited to any situation where any forward-looking statement later turns out to be inaccurate, whether as a result of new information, future events, or otherwise, except as may be required by applicable law. Investor Relations ContactAlex Whitelam, VP, Investor [email protected] (445) 448-9522 Visit our website at dormanproducts.com. The Investor Relations section of the website contains important Company information, including financial data and investor materials. Dorman encourages investors to visit its website periodically to view new and updated information. * Percentage of sales. Data may not add due to rounding. Selected Cash Flow Information (unaudited): DORMAN PRODUCTS, INC. Non-GAAP Financial Measures(in thousands, except per-share amounts) Our financial results include certain financial measures not derived in accordance with generally accepted accounting principles (GAAP). Non-GAAP financial measures should not be used as a substitute for GAAP measures, or considered in isolation, for the purpose of analyzing our operating performance, financial position or cash flows. Additionally, these non-GAAP measures may not be comparable to similarly titled measures reported by other companies. However, we have presented these non-GAAP financial measures because we believe this presentation, when reconciled to the corresponding GAAP measure, provides useful information to investors by offering additional ways of viewing our results, profitability trends, and underlying growth relative to prior and future periods and to our peers. Management uses these non-GAAP financial measures in making financial, operating, and planning decisions and in evaluating our performance. Non-GAAP financial measures may reflect adjustments for charges such as fair value adjustments, amortization, transaction costs, severance, accelerated depreciation, and other similar expenses related to acquisitions as well as other items that we believe are not related to our ongoing performance. Adjusted Net Income: * Amounts may not add due to rounding.See accompanying notes at the end of this supplemental schedule. Adjusted SG&A Expenses: * *Percentage of sales. Data may not add due to rounding. * *Percentage of sales. Data may not add due to rounding. [1] – Pretax acquisition-related intangible asset amortization results from allocating the purchase price of an acquisition to the acquired tangible and intangible assets of the acquired business and recognizing the cost of the intangible asset over the period of benefit. Such costs were $5.2 million pretax (or $3.9 million after tax) and $10.3 million pretax (or $7.9 million after tax) during the three and six months ended June 27, 2026, respectively. Such costs were $5.4 million pretax (or $4.1 million after tax) and $10.9 million pretax (or $8.2 million after tax) during the three and six months ended June 28, 2025, respectively. [2] – Pretax acquisition-related transaction and other costs include costs incurred to complete and integrate acquisitions and facility consolidation expenses. During the three and six months ended June 27, 2026, we incurred charges included in selling, general, and administrative expenses to complete and integrate acquisitions of $0.2 million pretax (or $0.2 million after tax) and $0.5 million pretax (or $0.4 million after tax), respectively. Such costs were $0.3 million pretax (or $0.2 million after tax) and $0.8 million pretax (or $0.6 million after tax), during the three and six months ended June 28, 2025, respectively. [3] – Pretax write-off of capitalized debt issuance costs totaled $0.8 million (or $0.6 million after tax) during the three and six months ended June 27, 2026. These write-offs are associated with retirement of our term loan debt and the modification of our revolving credit facility. [4] – Pretax reduction in workforce costs represents costs incurred in connection with our planned workforce reduction, including insurance continuation costs. During the three and six months ended June 28, 2025, the expenses were $0.0 million pretax (or $0.0 million after tax) and $0.1 million pretax (or $0.1 million after tax), respectively. [5] – Tax adjustments represent the aggregate tax effect of all non-GAAP adjustments reflected in the table above and totaled $(1.5) million and $(2.8) million during the three and six months ended June 27, 2026, respectively, and $(1.4) million and $(2.9) million during the three and six months ended June 28, 2025, respectively. Such items are estimated by applying our statutory tax rate to the pretax amount, or an actual tax amount for discrete items. 2026 Guidance: The Company updates the following guidance ranges related to its full year 2026 outlook: Impact of IEEPA Recovery: *Includes a prorated portion of the interest received as part of the IEEPA refund, which is included in Other income, net on our Consolidated Statements of Operations

Dorman Products (DORM) came out with quarterly earnings of $3.08 per share, beating the Zacks Consensus Estimate of $1.78 per share. This compares to earnings of $2.06 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +73.03%. A quarter ago, it was expected that this distributor of parts to automotive retailers would post earnings of $1.52 per share when it actually produced earnings of $1.57, delivering a surprise of +3.29%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Dorman Products, which belongs to the Zacks Automotive - Replacement Parts industry, posted revenues of $544.6 million for the quarter ended June 2026, missing the Zacks Consensus Estimate by 6.41%. This compares to year-ago revenues of $540.96 million. The company has topped consensus revenue estimates two times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Dorman Products shares have added about 8.1% since the beginning of the year versus the S&P 500's gain of 9.4%. While Dorman Products has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Dorman Products was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $2.44 on $584.33 million in revenues for the coming quarter and $8.22 on $2.29 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Automotive - Replacement Parts is currently in the bottom 12% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the broader Zacks Auto-Tires-Trucks sector, Atmus Filtration Technologies (ATMU), has yet to report results for the quarter ended June 2026. The results are expected to be released on August 7. This industrial filtration product company is expected to post quarterly earnings of $0.79 per share in its upcoming report, which represents a year-over-year change of +5.3%. The consensus EPS estimate for the quarter has been revised 0.7% higher over the last 30 days to the current level. Atmus Filtration Technologies' revenues are expected to be $510.5 million, up 12.6% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Dorman Products, Inc. (DORM) : Free Stock Analysis Report Atmus Filtration Technologies Inc. (ATMU) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

LKQ (LKQ) came out with quarterly earnings of $0.67 per share, missing the Zacks Consensus Estimate of $0.73 per share. This compares to earnings of $0.87 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -8.22%. A quarter ago, it was expected that this vehicle components company would post earnings of $0.67 per share when it actually produced earnings of $0.67, delivering no surprise. Over the last four quarters, the company has surpassed consensus EPS estimates just once. LKQ, which belongs to the Zacks Automotive - Replacement Parts industry, posted revenues of $3.41 billion for the quarter ended June 2026, missing the Zacks Consensus Estimate by 2.68%. This compares to year-ago revenues of $3.64 billion. The company has topped consensus revenue estimates two times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. LKQ shares have lost about 12.6% since the beginning of the year versus the S&P 500's gain of 6.9%. While LKQ has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for LKQ was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.86 on $3.55 billion in revenues for the coming quarter and $3.00 on $13.91 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Automotive - Replacement Parts is currently in the bottom 16% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, Dorman Products (DORM), is yet to report results for the quarter ended June 2026. The results are expected to be released on August 3. This distributor of parts to automotive retailers is expected to post quarterly earnings of $1.78 per share in its upcoming report, which represents a year-over-year change of -13.6%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Dorman Products' revenues are expected to be $581.9 million, up 7.6% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report LKQ Corporation (LKQ) : Free Stock Analysis Report Dorman Products, Inc. (DORM) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

COLMAR, Pa., July 13, 2026 (GLOBE NEWSWIRE) -- Dorman Products, Inc. (the “Company” or “Dorman”) (NASDAQ: DORM) will report its financial results for the second quarter ended June 27, 2026, after the close of the market on August 3, 2026. Dorman is scheduled to conduct a conference call to discuss its second quarter 2026 financial results on August 4, 2026, at 8:00 a.m. ET. The conference call can be accessed by dialing (800) 420-1459 within the U.S. or +1 (203) 518-9861 outside the U.S. When prompted, enter the conference ID “DORMQ226”. A live audio webcast, along with the accompanying presentation materials, can be accessed on the Company’s Investor Relations website at investors.dormanproducts.com. A replay of the webcast will be made available on the website shortly after the conclusion of the call. About Dorman Products Dorman gives professionals, enthusiasts, and owners greater freedom to fix motor vehicles. For over 100 years, we have been driving new solutions, releasing tens of thousands of aftermarket replacement products engineered to save time and money, and increase convenience and reliability. Founded and headquartered in the United States, we are a pioneering global organization offering an always-evolving catalog of products covering cars, trucks, and specialty vehicles, from chassis to body, from underhood to undercarriage, and from hardware to complex electronics. Forward-Looking Statements This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on current expectations that involve known and unknown risks, uncertainties, and other factors (many of which are outside of our control), which may cause actual events to be materially different from those expressed or implied by such forward-looking statements. For additional information concerning factors that could cause actual results to differ materially from the information contained in this press release, please see Dorman’s prior press releases and filings with the U.S. Securities and Exchange Commission (“SEC”), including Dorman’s most recent annual report on Form 10-K and its other SEC filings. Dorman is under no obligation to (and expressly disclaims any such obligation to) update any of the information in this press release if any forward-looking statement later turns out to be inaccurate, whether as a result of new information, future events, or otherwise, except as may be required by applicable law. Investor Relations Contact Alex Whitelam, VP, Investor [email protected] (445) 448-9522