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 third quarter ended
September 30, 2023.
Third Quarter Financial
ResultsThe Company reported third quarter 2023 net sales
of $488.2 million, up 18% compared to net sales of $413.5 million
in the third quarter of 2022. The sales growth was primarily driven
by the addition of SuperATV, price increases to offset inflation
and the introduction of new products to the market. Net sales
growth excluding acquisitions was 6% compared to the third quarter
of 2022.
Gross profit was $183.2 million in the third
quarter of 2023, or 37.5% of net sales, compared to $131.9 million,
or 31.9% of net sales, for the same quarter last year. Adjusted
gross margin* was 37.5% in the third quarter of 2023 compared to
32.0% in the same quarter last year. The 550-basis-point increase
in adjusted gross margin* is primarily due to sales of lower-cost
inventory, price increases and the addition of SuperATV, which has
a higher gross margin percentage than the Company average. In
addition, adjusted gross margin* increased 240 basis points
compared to the second quarter of 2023.
Selling, general and administrative (“SG&A”)
expenses were $119.0 million, or 24.4% of net sales, in the third
quarter of 2023 compared to $89.8 million, or 21.7% of net sales,
for the same quarter last year. Adjusted SG&A expenses* were
$114.1 million, or 23.4% of net sales, in the third quarter of
2023, compared to $82.3 million, or 19.9% of net sales, in the same
quarter last year. The increase in adjusted SG&A expenses* as a
percentage of net sales compared to the third quarter of 2022 was
due primarily to the addition of SuperATV, which has higher
SG&A expenses as a percentage of net sales than the Company
average, an increase in variable compensation expense and the
impact of higher interest rates on our customer accounts receivable
factoring programs.
Net interest expense was $12.2 million for the
third quarter of 2023 compared to $2.3 million for the same quarter
last year. The increase of $9.9 million primarily reflects the
addition of the term loan used to complete the acquisition of
SuperATV in October 2022 and significantly higher interest rates
compared to the prior year.
Income tax expense was $12.1 million, or 23.0%
of income before income taxes, compared to $9.1 million, or 22.9%
of income before income taxes, in the same quarter last year. The
effective tax rate was flat, with an increase from state tax
expense and the effect of foreign operations offset by discrete
benefits.
Net income for the third quarter of 2023 was
$40.5 million, or $1.28 per diluted share, compared to $30.6
million, or $0.97 per diluted share, in the prior-year quarter.
Adjusted net income* in the third quarter of 2023 was $44.3
million, or $1.40 per diluted share, compared to $37.0 million, or
$1.17 per diluted share, in the prior-year quarter.
Kevin Olsen, Dorman’s President and Chief
Executive Officer, stated, “We delivered strong top line growth,
record profits and robust cash flow in the third quarter, and I am
proud of the hard work from our contributors to deliver these
results. These results were driven by the continued improvement of
our adjusted gross margin*, which increased 240 basis points over
the second quarter of 2023, and 550 basis points year-over-year. As
a result, we achieved record third quarter adjusted diluted EPS*,
which increased 20% over last year and 39% over the second
quarter.
“In addition, we had another quarter of healthy
cash flow, with cash from operations of $56 million. Inventory was
$17 million lower in the quarter, $130 million lower year-to-date,
and a primary driver of the increase in cash from operations. Over
the last few quarters, we focused on reducing our debt and repaid
$50 million in the quarter, for total repayments of $129 million
year-to-date. We expect continued strong cash flow in the fourth
quarter.
“From an innovation standpoint, we continue to
focus on bringing products to market that will drive profitable
revenue growth for us and our customers and improve the experience
of our ultimate end users. During the third quarter, we launched
hundreds of new products across all our businesses. We are a leader
in the industry in bringing new complex electronic parts to the
aftermarket, a result of investing in our people and technologies
to grow our capabilities, and this will continue to be a focus for
us.
“The SuperATV integration continues to go well
and is substantially complete. We are on track to meet our year one
expectations and the team has done a solid job executing on the
many growth initiatives that were identified, which are expected to
result in profitable growth in the future.
“While we were pleased with third quarter sales
growth, we did experience softer demand than we expected due to a
number of factors, including the uneven performance of some of our
larger light-duty customers. As a result of this softer demand and
faced with the uncertainties surrounding the overall economic
environment, we are lowering our full-year net sales forecast
range. We are also lowering our earnings guidance to be in line
with our updated net sales forecast resulting in fourth quarter
revised adjusted diluted EPS* growth of 35% - 55% over the prior
year fourth quarter, which included an extra week of results.
“Overall, industry fundamentals remain strong,
and we are encouraged by the strength of our business, as evidenced
by our third quarter results. Moreover, we believe that our
industry leadership in innovation and new product development
continues to set Dorman apart as a preferred supplier to the
aftermarket.”
2023 GuidanceThe Company
updated its full-year 2023 guidance, detailed in the table below,
which includes the impact of the SuperATV acquisition but excludes
any potential impacts from future acquisitions, additional supply
chain disruptions, significant interest rate increases, or share
repurchases.
|
Updated 2023 Fiscal Year |
Previous 2023 Fiscal Year |
Net
Sales |
$1.925B – $1.945B |
$1.950B – $2.000B |
Growth vs. 2022 |
11.0% – 12.2% |
12.5% – 15.4% |
Diluted
EPS |
$3.75 – $3.95 |
$4.35 – $4.55 |
Growth vs. 2022 |
(2.6%) – 2.6% |
13.0% – 18.2% |
Adjusted
Diluted EPS* |
$4.35 – $4.55 |
$5.15 – $5.35 |
Growth vs. 2022 |
(8.6%) – (4.4%) |
8.2% – 12.4% |
Tax Rate Estimate |
24% |
|
24% |
|
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 and 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.
Forward-Looking StatementsThis
press release contains “forward-looking statements” within the
meaning of the Private Securities Litigation Reform Act of 1995,
including statements related to net sales, diluted and adjusted
diluted earnings per share, gross profit, gross margin, adjusted
gross margin, SG&A, adjusted SG&A, income tax expense,
income before income taxes, net income, cash and cash equivalents,
indebtedness, liquidity, the Company’s share repurchase program,
the Company’s outlook and distribution facility costs and
productivity initiatives. Words such as “believe,” “demonstrate,”
“expect,” “estimate,” “forecast,” “anticipate,” “plan,” “should,”
“will” and “likely” and similar expressions identify
forward-looking statements. However, the absence of these words
does not mean the statements are not forward-looking. In addition,
statements that are not historical should also be considered
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 a number
of 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; widespread public
health pandemics, such as COVID-19; our ability to purchase
necessary materials from our suppliers and the impacts of any
related logistics constraints; financial and economic factors, such
as our level of indebtedness, fluctuations in interest rates and
inflation; political and regulatory matters, such as changes in
trade policy, the imposition of tariffs and climate regulation; our
ability to protect our intellectual property and defend against any
claims of infringement; and our ability to protect our information
security systems and defend against cyberattacks.. Please refer to
“Statement Regarding Forward-Looking Statements” and “Item 1A. Risk
Factors” located in Part I of our in the Company’s Annual Report on
Form 10-K for the fiscal year ended December 31, 2022, filed with
the Securities and Exchange Commission (“SEC”), as updated by our
subsequent filings with the SEC, for a description of these and
other risks and uncertainties that could cause actual results to
differ materially from those projected or implied by the
forward-looking statements. 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.
Investor Relations
ContactMichael P. DickersonVice President, Investor
Relations and Risk Managementmdickerson@dormanproducts.com (517)
667-4003
Visit our website at www.dormanproducts.com. The Investor
Relations section of the website contains a significant amount of
information about Dorman, including financial and other information
for investors. Dorman encourages investors to visit its website
periodically to view new and updated information.
|
DORMAN PRODUCTS, INC. Consolidated Statements of
Operations(in thousands, except per-share amounts) |
|
|
Three Months Ended |
|
Three Months Ended |
(unaudited) |
9/30/23 |
|
Pct.* |
|
9/24/22 |
|
Pct. * |
Net sales |
$ |
488,186 |
|
|
100.0 |
|
|
$ |
413,470 |
|
|
100.0 |
|
Cost of goods sold |
|
304,968 |
|
|
62.5 |
|
|
|
281,559 |
|
|
68.1 |
|
Gross profit |
|
183,218 |
|
|
37.5 |
|
|
|
131,911 |
|
|
31.9 |
|
Selling, general and
administrative expenses |
|
119,010 |
|
|
24.4 |
|
|
|
89,814 |
|
|
21.7 |
|
Income from operations |
|
64,208 |
|
|
13.2 |
|
|
|
42,097 |
|
|
10.2 |
|
Interest expense, net |
|
12,215 |
|
|
2.5 |
|
|
|
2,344 |
|
|
0.6 |
|
Other (income) expense,
net |
|
(605 |
) |
|
(0.1 |
) |
|
|
65 |
|
|
0.0 |
|
Income before income taxes |
|
52,598 |
|
|
10.8 |
|
|
|
39,688 |
|
|
9.6 |
|
Provision for income
taxes |
|
12,076 |
|
|
2.5 |
|
|
|
9,087 |
|
|
2.2 |
|
Net income |
$ |
40,522 |
|
|
8.3 |
|
|
$ |
30,601 |
|
|
7.4 |
|
|
|
|
|
|
|
|
|
Diluted earnings per
share |
$ |
1.28 |
|
|
|
|
$ |
0.97 |
|
|
|
|
|
|
|
|
|
|
|
Weighted average diluted
shares outstanding |
|
31,555 |
|
|
|
|
|
31,545 |
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended |
|
Nine Months Ended |
(unaudited) |
9/30/23 |
|
Pct.* |
|
9/24/22 |
|
Pct. * |
Net
sales |
$ |
1,435,492 |
|
|
100.0 |
|
|
$ |
1,232,468 |
|
|
100.0 |
|
Cost of goods sold |
|
944,291 |
|
|
65.8 |
|
|
|
825,792 |
|
|
67.0 |
|
Gross profit |
|
491,201 |
|
|
34.2 |
|
|
|
406,676 |
|
|
33.0 |
|
Selling, general and
administrative expenses |
|
353,681 |
|
|
24.6 |
|
|
|
268,400 |
|
|
21.8 |
|
Income from operations |
|
137,520 |
|
|
9.6 |
|
|
|
138,276 |
|
|
11.2 |
|
Interest expense, net |
|
36,733 |
|
|
2.6 |
|
|
|
5,140 |
|
|
0.4 |
|
Other income, net |
|
(1,358 |
) |
|
(0.1 |
) |
|
|
(130 |
) |
|
(0.0 |
) |
Income before income taxes |
|
102,145 |
|
|
7.1 |
|
|
|
133,266 |
|
|
10.8 |
|
Provision for income
taxes |
|
23,170 |
|
|
1.6 |
|
|
|
29,553 |
|
|
2.4 |
|
Net income |
$ |
78,975 |
|
|
5.5 |
|
|
$ |
103,713 |
|
|
8.4 |
|
|
|
|
|
|
|
|
|
Diluted earnings per
share |
$ |
2.50 |
|
|
|
|
$ |
3.29 |
|
|
|
|
|
|
|
|
|
|
|
Weighted average diluted
shares outstanding |
|
31,540 |
|
|
|
|
|
31,561 |
|
|
|
* Percentage of sales. Data may not add due to rounding.
|
DORMAN PRODUCTS, INC. Consolidated Balance Sheets
(in thousands, except share data) |
|
(unaudited) |
9/30/23 |
|
12/31/22 |
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
31,953 |
|
|
$ |
46,034 |
|
Accounts receivable, less allowance for doubtful accounts of $1,715
and $1,363 |
|
484,447 |
|
|
|
427,385 |
|
Inventories |
|
625,593 |
|
|
|
755,901 |
|
Prepaids and other current assets |
|
53,363 |
|
|
|
39,800 |
|
Total current assets |
|
1,195,356 |
|
|
|
1,269,120 |
|
Property, plant and equipment,
net |
|
157,737 |
|
|
|
148,477 |
|
Operating lease right-of-use
assets |
|
107,645 |
|
|
|
109,977 |
|
Goodwill |
|
443,220 |
|
|
|
443,035 |
|
Intangible assets, net |
|
306,802 |
|
|
|
322,409 |
|
Other assets |
|
49,594 |
|
|
|
48,768 |
|
Total assets |
$ |
2,260,354 |
|
|
$ |
2,341,786 |
|
Liabilities and
shareholders’ equity |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
158,418 |
|
|
$ |
179,819 |
|
Accrued compensation |
|
15,844 |
|
|
|
19,490 |
|
Accrued customer rebates and returns |
|
192,014 |
|
|
|
192,116 |
|
Revolving credit facility |
|
119,660 |
|
|
|
239,363 |
|
Current portion of long-term debt |
|
12,500 |
|
|
|
12,500 |
|
Other accrued liabilities |
|
34,612 |
|
|
|
35,007 |
|
Total current liabilities |
|
533,048 |
|
|
|
678,295 |
|
Long-term debt |
|
473,389 |
|
|
|
482,464 |
|
Long-term operating lease
liabilities |
|
95,200 |
|
|
|
98,221 |
|
Other long-term
liabilities |
|
15,484 |
|
|
|
28,349 |
|
Deferred tax liabilities,
net |
|
15,140 |
|
|
|
11,826 |
|
Commitments and
contingencies |
|
|
|
Shareholders’
equity: |
|
|
|
Common stock, $0.01 par value; 50,000,000 shares authorized;
31,487,494 and 31,430,632 shares issued and outstanding in 2023 and
2022, respectively |
|
315 |
|
|
|
314 |
|
Additional paid-in capital |
|
97,342 |
|
|
|
88,750 |
|
Retained earnings |
|
1,034,268 |
|
|
|
956,870 |
|
Accumulated other comprehensive loss |
|
(3,832 |
) |
|
|
(3,303 |
) |
Total shareholders’ equity |
|
1,128,093 |
|
|
|
1,042,631 |
|
Total liabilities and shareholders' equity |
$ |
2,260,354 |
|
|
$ |
2,341,786 |
|
Selected Cash Flow Information (unaudited):
|
Three Months Ended |
|
Nine Months Ended |
(in thousands) |
9/30/23 |
|
9/24/22 |
|
9/30/23 |
|
9/24/22 |
Cash provided by operating activities |
$ |
56,224 |
|
$ |
(8,042 |
) |
|
$ |
149,110 |
|
$ |
29,344 |
Depreciation, amortization and accretion |
$ |
13,817 |
|
$ |
11,531 |
|
|
$ |
40,786 |
|
$ |
31,131 |
Capital
expenditures |
$ |
9,667 |
|
$ |
7,680 |
|
|
$ |
32,936 |
|
$ |
23,780 |
|
|
|
|
|
|
|
|
|
|
|
|
|
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:
|
Three Months Ended |
|
Nine Months Ended |
(unaudited) |
9/30/23* |
|
9/24/22* |
|
9/30/23* |
|
9/24/22* |
Net income (GAAP) |
$ |
40,522 |
|
|
$ |
30,601 |
|
|
$ |
78,975 |
|
|
$ |
103,713 |
|
Pretax
acquisition-related intangible assets amortization [1] |
|
5,485 |
|
|
|
2,993 |
|
|
|
16,336 |
|
|
|
8,988 |
|
Pretax
acquisition-related transaction and other costs [2] |
|
465 |
|
|
|
4,851 |
|
|
|
14,880 |
|
|
|
9,537 |
|
Executive transition services expense [3] |
|
— |
|
|
|
— |
|
|
|
1,801 |
|
|
|
— |
|
Fair
value adjustment to contingent consideration [4] |
|
(1,000 |
) |
|
|
— |
|
|
|
(13,400 |
) |
|
|
— |
|
Tax
adjustment (related to above items) [5] |
|
(1,214 |
) |
|
|
(1,451 |
) |
|
|
(4,891 |
) |
|
|
(3,925 |
) |
Adjusted
net income (Non-GAAP) |
$ |
44,258 |
|
|
$ |
36,994 |
|
|
$ |
93,701 |
|
|
$ |
118,313 |
|
|
|
|
|
|
|
|
|
Diluted
earnings per share (GAAP) |
$ |
1.28 |
|
|
$ |
0.97 |
|
|
$ |
2.50 |
|
|
$ |
3.29 |
|
Pretax
acquisition-related intangible assets amortization [1] |
|
0.17 |
|
|
|
0.09 |
|
|
|
0.52 |
|
|
|
0.28 |
|
Pretax
acquisition-related transaction and other costs [2] |
|
0.01 |
|
|
|
0.15 |
|
|
|
0.47 |
|
|
|
0.30 |
|
Executive transition services expense [3] |
|
— |
|
|
|
— |
|
|
|
0.06 |
|
|
|
— |
|
Fair
value adjustment to contingent consideration [4] |
|
(0.03 |
) |
|
|
— |
|
|
|
(0.42 |
) |
|
|
— |
|
Tax
adjustment (related to above items) [5] |
|
(0.04 |
) |
|
|
(0.05 |
) |
|
|
(0.16 |
) |
|
|
(0.12 |
) |
Adjusted
diluted earnings per share (Non-GAAP) |
$ |
1.40 |
|
|
$ |
1.17 |
|
|
$ |
2.97 |
|
|
$ |
3.75 |
|
|
|
|
|
|
|
|
|
Weighted
average diluted shares outstanding |
|
31,555 |
|
|
|
31,545 |
|
|
|
31,540 |
|
|
|
31,561 |
|
* Amounts may not add due to rounding.See accompanying notes at
the end of this supplemental schedule.
Adjusted Gross Profit:
|
Three Months Ended |
|
Three Months Ended |
(unaudited) |
9/30/23 |
|
Pct.** |
|
|
9/24/22 |
|
Pct.** |
|
Gross profit (GAAP) |
$ |
183,218 |
|
|
37.5 |
|
|
$ |
131,911 |
|
|
31.9 |
|
Pretax
acquisition-related transaction and other costs [2] |
|
6 |
|
|
0.0 |
|
|
|
289 |
|
|
0.1 |
|
Adjusted
gross profit (Non-GAAP) |
$ |
183,224 |
|
|
37.5 |
|
|
$ |
132,200 |
|
|
32.0 |
|
|
|
|
|
|
|
|
|
|
|
Net
sales |
$ |
488,186 |
|
|
|
|
|
$ |
413,470 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended |
|
Nine Months Ended |
(unaudited) |
9/30/23 |
|
Pct.** |
|
|
9/24/22 |
|
Pct.** |
|
Gross
profit (GAAP) |
$ |
491,201 |
|
|
34.2 |
|
|
$ |
406,676 |
|
|
33.0 |
|
Pretax
acquisition-related transaction and other costs [2] |
|
11,806 |
|
|
0.8 |
|
|
|
4,351 |
|
|
0.4 |
|
Adjusted
gross profit (Non-GAAP) |
$ |
503,007 |
|
|
35.0 |
|
|
$ |
411,027 |
|
|
33.3 |
|
|
|
|
|
|
|
|
|
|
|
Net
sales |
$ |
1,435,492 |
|
|
|
|
|
$ |
1,232,468 |
|
|
|
|
Adjusted SG&A Expenses:
|
Three Months Ended |
|
Three Months Ended |
(unaudited) |
9/30/23 |
|
Pct.** |
|
9/24/22 |
|
Pct.** |
SG&A expenses (GAAP) |
$ |
119,010 |
|
|
24.4 |
|
|
$ |
89,814 |
|
|
21.7 |
|
Pretax
acquisition-related intangible assets amortization [1] |
|
(5,485 |
) |
|
(1.1 |
) |
|
|
(2,993 |
) |
|
(0.7 |
) |
Pretax
acquisition-related transaction and other costs [2] |
|
(459 |
) |
|
(0.1 |
) |
|
|
(4,562 |
) |
|
(1.1 |
) |
Executive transition services expense [3] |
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
Fair
value adjustment to contingent consideration [4] |
|
1,000 |
|
|
0.2 |
|
|
|
— |
|
|
— |
|
Adjusted
SG&A expenses (Non-GAAP) |
$ |
114,066 |
|
|
23.4 |
|
|
$ |
82,259 |
|
|
19.9 |
|
|
|
|
|
|
|
|
|
Net
sales |
$ |
488,186 |
|
|
|
|
$ |
413,470 |
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended |
|
Nine Months Ended |
(unaudited) |
9/30/23 |
|
Pct.** |
|
9/24/22 |
|
Pct.** |
SG&A
expenses (GAAP) |
$ |
353,681 |
|
|
24.6 |
|
|
$ |
268,400 |
|
|
21.8 |
|
Pretax
acquisition-related intangible assets amortization [1] |
|
(16,336 |
) |
|
(1.1 |
) |
|
|
(8,988 |
) |
|
(0.7 |
) |
Pretax
acquisition-related transaction and other costs [2] |
|
(3,074 |
) |
|
(0.2 |
) |
|
|
(5,186 |
) |
|
(0.4 |
) |
Executive transition services expense [3] |
|
(1,801 |
) |
|
(0.1 |
) |
|
$ |
— |
|
|
— |
|
Fair
value adjustment to contingent consideration [4] |
|
13,400 |
|
|
0.9 |
|
|
|
— |
|
|
— |
|
Adjusted
SG&A expenses (Non-GAAP) |
$ |
345,870 |
|
|
24.1 |
|
|
$ |
254,226 |
|
|
20.6 |
|
|
|
|
|
|
|
|
|
Net
sales |
$ |
1,435,492 |
|
|
|
|
$ |
1,232,468 |
|
|
|
* *Percentage of sales. Data may not add due to rounding.
[1] – Pretax acquisition-related intangible
asset amortization results from allocating the purchase price of
acquisitions 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 $5.5 million pretax (or
$4.2 million after tax) and $16.3 million pretax (or $12.3 million
after tax) during the three and nine months ended
September 30, 2023, respectively. Such costs were $3.0 million
pretax (or $2.2 million after tax) and $9.0 million pretax (or $6.8
million after tax) during the three and nine months ended
September 24, 2022, respectively.
[2] – Pretax acquisition-related transaction and
other costs include costs incurred to complete and integrate
acquisitions, accretion on contingent consideration obligations,
inventory fair value adjustments and facility consolidation and
start-up expenses. During the three and nine months ended
September 30, 2023, we incurred charges included in cost of
goods sold for integration costs, other facility consolidation
expenses and inventory fair value adjustments of $0.0 million
pretax (or $0.0 million after tax) and $11.8 million pretax (or
$8.9 million after tax), respectively. During the three and nine
months ended September 30, 2023, we incurred charges included
in selling, general and administrative expenses to complete and
integrate acquisitions, accretion on contingent consideration
obligations and facility consolidation and start-up expenses of
$0.5 million pretax (or $0.4 million after tax) and $3.1 million
pretax (or $2.4 million after tax), respectively.
During the three and nine months ended
September 24, 2022, we incurred charges included in cost of
goods sold for integration costs, other facility consolidation
expenses and inventory fair value adjustments of $0.3 million
pretax (or $0.2 million after tax) and $ 4.4 (or $3.3 million after
tax), respectively. During the three and nine months ended
September 24, 2022, we incurred charges included in selling,
general and administrative expenses to complete and integrate
acquisitions, and facility consolidation and start-up expenses of
$4.6 million pretax (or $3.9 million after tax) and $5.2 million
pretax (or $4.4 million after tax), respectively.
[3] – Executive transition service expenses
represents an accrual for costs required to be paid under an
agreement in connection with the planned transition of our
Executive Chairman to Non-Executive Chairman, and other
professional services rendered in connection with the execution of
the agreement. The expense was $1.8 million pretax (or $1.4 million
after tax) during the nine months ended September 30,
2023.
[4] – Fair value adjustments to contingent
consideration represents the change to our estimates of ultimate
earnout payment amounts for a previously completed acquisition
based on projections of financial performance compared to the
target amounts defined in the purchase agreement and totaled $1.0
million pretax (or $0.8 million after tax) and $13.4 million pretax
(or $10.2 million after tax) during the three and nine months ended
September 30, 2023, respectively.
[5] – Tax adjustments represent the aggregate
tax effect of all non-GAAP adjustments reflected in the table above
and totaled $(1.2) million and $(4.9) million during the three and
nine months ended September 30, 2023, respectively, and $(1.5)
million and $(3.9) million during the three and nine months ended
September 24, 2022, respectively. Such items are estimated by
applying our statutory tax rate to the pretax amount, or an actual
tax amount for discrete items.
2023 Guidance:
The Company provided the following updated guidance ranges
related to their fiscal 2023 outlook:
|
Year Ending 12/31/2023 |
(unaudited) |
Low End* |
|
High End* |
Diluted earnings per share (GAAP) |
$ |
3.75 |
|
|
$ |
3.95 |
|
Pretax
acquisition-related intangible assets amortization |
|
0.69 |
|
|
|
0.69 |
|
Pretax
acquisition transaction and other costs |
|
0.48 |
|
|
|
0.48 |
|
Executive transition services expense |
|
0.06 |
|
|
|
0.06 |
|
Fair
value adjustment to contingent consideration |
|
(0.43 |
) |
|
|
(0.43 |
) |
Tax
adjustment (related to above items) |
|
(0.20 |
) |
|
|
(0.20 |
) |
Adjusted
diluted earnings per share (Non-GAAP) |
$ |
4.35 |
|
|
$ |
4.55 |
|
|
|
|
|
Weighted
average diluted shares outstanding |
|
31,500 |
|
|
|
31,500 |
|
*Data may not add due to rounding.
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