Dorman Products, Inc.DORM

Dorman Products, Inc. Segments Disclosure

10-KFiled Feb 27, 20263 min read
Segment Information
We operate and report our results in three business segments, Light Duty, Heavy Duty, and Specialty Vehicle, consistent with the three sectors of the motor vehicle aftermarket industry in which we participate. The Light Duty segment designs and markets replacement parts and fasteners primarily for passenger cars and light trucks with sales to retailers and wholesale distributors who primarily serve passenger car and light truck customers. The Heavy Duty segment designs and markets replacement parts primarily for medium and heavy trucks with sales to independent distributors, independent component specialists and rebuilders, and auto parts stores that focus on the heavy-duty market. The Specialty Vehicle segment designs, markets, and manufactures aftermarket parts and accessories for the powersports market with sales through direct-to-consumer, dealers, and installers.
The Company's chief operating decision maker ("CODM") is the chief executive officer. The CODM uses income from operations to assess segment performance. The CODM utilizes this measure for each segment in the annual budget and forecasting cycles and considers performance against established targets for purposes of allocating Company resources to each segment and in the determination of compensation for certain employees. We measure segment income from operations based on income from operations excluding acquisition-related intangible assets amortization, acquisition-related transaction and other costs, and other special charges. Corporate expenses are allocated to the segments based on segment net sales as a percentage of consolidated net sales. Segment assets consist of inventories, accounts receivable, and property, plant, and equipment, net. Intersegment sales are not material.
Segment results are as follows:
For the Year Ended December 31, 2025
(in thousands)Light DutyHeavy DutySpecialty VehicleTotal
Net sales$1,692,055 $232,594 $205,670 $2,130,319 
Cost of goods sold956,839 170,354 105,389 1,232,582 
Factoring expense58,309 — — 58,309 
Other segment expenses329,589 57,129 73,431 460,149 
Segment income from operations$347,318 $5,111 $26,850 $379,279 
Segment assets$1,330,389 $199,768 $76,891 $1,607,048 
Depreciation$26,381 $3,349 $3,943 $33,673 
Capital expenditures$33,861 $2,817 $1,291 $37,969 
For the Year Ended December 31, 2024
(in thousands)Light DutyHeavy DutySpecialty VehicleTotal
Net sales$1,565,601 $231,515 $212,081 $2,009,197 
Cost of goods sold925,319 171,732 104,994 1,202,045 
Factoring expense51,252 — — 51,252 
Other segment expenses304,866 53,303 74,752 432,921 
Segment income from operations$284,164 $6,480 $32,335 $322,979 
Segment assets$1,203,165 $157,493 $85,606 $1,446,264 
Depreciation$26,485 $3,725 $3,750 $33,960 
Capital expenditures$34,164 $2,421 $2,836 $39,421 
For the Year Ended December 31, 2023
(in thousands)Light DutyHeavy DutySpecialty VehicleTotal
Net sales$1,462,474 $256,913 $210,401 $1,929,788 
Cost of goods sold928,983 192,729 110,840 1,232,552 
Factoring expense50,231 — — 50,231 
Other segment expenses296,101 49,679 67,943 413,723 
Segment income from operations$187,159 $14,505 $31,618 $233,282 
Segment assets$1,083,347 $162,583 $78,424 $1,324,354 
Depreciation$25,239 $3,239 $3,420 $31,898 
Capital expenditures$33,445 $3,581 $6,942 $43,968 
In the preceding segment tables, Other segment expenses consist of selling, general, and administrative expenses, including salaries and benefits for product development, research, sales, marketing and administrative functions, facility costs, information technology costs, and other general expenses.
A reconciliation of segment income from operations to consolidated income before income taxes is as follows:
For the Year Ended December 31,
(in thousands)202520242023
Segment income from operations$379,279 $322,979 $233,282 
Acquisition-related intangible assets amortization(21,580)(22,476)(21,817)
Acquisition-related transaction and other costs(1,299)(2,621)(15,373)
Fair value adjustment to contingent consideration— — 20,469 
Executive transition services expenses— — (1,801)
Pretax reduction in workforce costs(147)(4,973)— 
Goodwill impairment charge(56,706)— — 
Interest expense, net(28,575)(39,727)(48,061)
Other income, net4,473 3,070 1,804 
Consolidated income before income taxes$275,445 $256,252 $168,503 
A reconciliation of segment assets to consolidated assets is as follows:
December 31,
(in thousands)202520242023
Segment assets$1,607,048 $1,446,264 $1,324,354 
Other current assets83,228 87,968 69,468 
Other non-current assets802,802 890,289 898,585 
Consolidated assets$2,493,078 $2,424,521 $2,292,407 
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About Segments Disclosures

Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.

Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.

Other Available Disclosures

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