Dorman Products, Inc.DORM
Dorman Products, Inc. Leases Disclosure
Leases
We determine whether an arrangement is a lease at inception. This determination generally depends on whether the arrangement conveys the right to control the use of an identified fixed asset explicitly or implicitly for a period of time in exchange for consideration. Control of an underlying asset is conveyed if we obtain the rights to direct the use of the asset and to obtain substantially all of the economic benefit from its use. We have operating leases for distribution centers, sales offices, and certain warehouse and office equipment. Our operating leases have remaining lease terms of 1 to 8 years, many of which include one or more renewal options. We consider these renewal options in determining the lease term used to establish our right-of-use assets and lease liabilities when it is determined that it is reasonably certain that the renewal option will be exercised. Substantially all of our equipment leases and some of our real estate leases have terms of less than one year. Some of our operating lease agreements include variable lease costs, primarily taxes, insurance, common area maintenance, or increases in rental costs related to inflation.
Operating leases are included in the right-of-use lease assets, other current liabilities, and long-term lease liabilities on the Consolidated Balance Sheet. Right-of-use assets and lease liabilities are recognized at each lease’s commencement date based on the present values of its lease payments over its respective lease term. When a borrowing rate is not explicitly available for a lease, our incremental borrowing rate is used based on information available at the lease’s commencement date to determine the present value of its lease payments. The incremental borrowing rate is not commonly quoted and is derived through a combination of inputs, including our credit rating and the impact of full collateralization. The incremental borrowing rate is based on our collateralized borrowing capabilities over a similar term to the lease payments. We utilized the consolidated group borrowing rate for all leases, as we operate a centralized treasury operation. Operating lease payments are recognized on a straight-line basis over the lease term. We had no material finance leases as of December 31, 2025, or 2024.
Practical Expedients and Accounting Policy Elections
We have made certain accounting policy elections and are using certain practical expedients permitted under GAAP, as follows:
•Including both lease and non-lease components as a single lease component, as non-lease components of contracts have not historically been material.
•Accounting for leases with terms of one year or less as short-term leases and, as such, they are not included in the right-of-use assets or lease liabilities.
As of December 31, 2025, and 2024, there were no material variable lease costs or sublease income. Cash paid for operating leases was $26.6 million, $22.8 million, and $21.2 million during the years ended December 31, 2025, 2024, and 2023, respectively, which is classified in operating activities on the Consolidated Statements of Cash Flows. The following table summarizes the lease expense:
| For the Year Ended December 31, | |||||||||||||||||
| (in thousands) | 2025 | 2024 | 2023 | ||||||||||||||
| Operating lease expense | $ | 28,030 | $ | 23,926 | $ | 21,747 | |||||||||||
| Short-term lease expense | 8,074 | 4,159 | 7,169 | ||||||||||||||
| Total lease expense | $ | 36,104 | $ | 28,085 | $ | 28,916 | |||||||||||
Supplemental balance sheet information related to our operating leases is as follows:
| December 31, | |||||||||||
| (in thousands) | 2025 | 2024 | |||||||||
| Operating lease right-of-use assets | $ | 112,805 | $ | 118,499 | |||||||
| $ | 24,481 | $ | 19,717 | ||||||||
| Long-term operating lease liabilities | 96,568 | 105,142 | |||||||||
| Total operating lease liabilities | $ | 121,049 | $ | 124,859 | |||||||
| Weighted average remaining lease term (years) | 5.48 | 6.33 | |||||||||
| Weighted average discount rate | 5.20 | % | 5.09 | % | |||||||
The following table summarizes the maturities of our lease liabilities for all operating leases as of December 31, 2025:
| (in thousands) | |||||
| 2026 | $ | 29,985 | |||
| 2027 | 27,813 | ||||
| 2028 | 21,234 | ||||
| 2029 | 19,262 | ||||
| 2030 | 18,015 | ||||
| Thereafter | 22,478 | ||||
| Total lease payments | 138,787 | ||||
| Less: Imputed interest | (17,738) | ||||
| Present value of lease liabilities | $ | 121,049 | |||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 27, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Feb 28, 2024 | |
| 2022 | Mar 1, 2023 | |
| 2021 | Feb 22, 2022 | |
| 2020 | Feb 22, 2021 | |
| 2019 | Feb 26, 2020 | |
| 2018 | Feb 26, 2019 | |
| 2017 | Feb 27, 2018 | |
| 2016 | Feb 27, 2017 | |
| 2015 | Feb 23, 2016 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.