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- **Revenue Beat**: Q3 net sales $544M (+7.9% YoY), driven by tariff pricing and mid-single-digit POS growth. Light Duty up 9%, Heavy Duty 6%.
- **Margin Strength**: Operating margin 20.5% (+340 bps), gross margin 44.4% (+390 bps). Q4 margin warning due to tariff costs.
- **EPS Growth**: $2.62 EPS (+34%), with 2025 guidance $8.60-$8.90 EPS (+21-25%).
- **Supply Chain Shift**: China supply reduced to 30-40%, diversification supporting long-term margin targets.
- **M&A Opportunity**: Strong balance sheet ($654M liquidity) enables strategic acquisitions in fragmented markets.

**【CEO Summary Section】**
- **Revenue Growth**: Consolidated net sales of $544 million, up 7.9% YoY, driven by tariff-related pricing and mid-single-digit POS growth. Light Duty segment grew 9%, Heavy Duty 6%, and Specialty Vehicle was flat.
- **Margin Expansion**: Adjusted operating margin improved 340 bps to 20.5%, with gross margin up 390 bps to 44.4%. Q4 gross margin expected to decline due to higher tariff costs in inventory.
- **Earnings**: Adjusted EPS of $2.62, up 34% YoY. Operating cash flow $12 million, free cash flow $2 million, impacted by tariffs.
- **Segment Highlights**: Light Duty benefited from new products like electronic power steering racks. Heavy Duty saw net sales growth but flat margins. Specialty Vehicle maintained strong UTV/ATV ridership despite market challenges.

**【CFO Financial Commentary】**
- **Financial Performance**: Net sales growth 7.9%, driven by pricing and diversification. Adjusted operating income $111 million, up 30%. Tax rate expected 23.5% for the year.
- **Supply Chain**: China supply reduced to 30-40%, with U.S. and rest-of-world diversification. Free cash flow expected to rebound post-Q4 tariff impact.
- **Guidance**: 2025 net sales growth 7-9%, EPS $8.60-$8.90 (21-25% growth). Q4 gross margin warning due to tariff pass-through timing.

**【Q&A Highlights】**
- **Elasticity**: DIFM (nondiscretionary) parts show inelastic demand, while DIY faces headwinds. Dorman's portfolio focus on DIFM supports margin resilience.
- **Margin Outlook**: Q4 margin compression expected, but long-term targets (mid-teens Heavy Duty, high-teens Specialty) remain intact.
- **M&A**: Active pipeline across segments, with balance sheet strength ($654M liquidity) supporting strategic acquisitions.
- **Tariff Strategy**: Diversification and supplier negotiations mitigate risk, with 30-40% China exposure by year-end.

Dorman Products, Inc. (DORM) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

DORM

DORM fundamentals

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