We are investigating Dorman Products, Inc. (DORM) (“Dorman” or the “Company”) for potential violations of the federal securities laws.
On February 24, 2020, Dorman issued a press release announcing its financial results for the fourth quarter and fiscal year ended December 28, 2019. Among other results, Dorman announced fourth quarter net sales of $239.6 million, down 8% compared to $260.3 million in the prior year, and diluted earnings per share in the quarter on a GAAP basis of $0.54, down 49% compared to $1.05 in the prior year. Dorman also disclosed that “[d]uring the fourth quarter, we recorded an estimated pre-tax charge of $2.8 million ($2.3 million after tax or $0.07 per diluted share) related to the underpayment of duties to U.S. Customs arising from the misclassification of certain imported products over a five-year period. The charge, which is expected to be one-time in nature, follows an internal review and the Company’s notification to U.S. Customs of its election to submit to a voluntary prior disclosure process to rectify historical misclassifications and underpayment of duties, as previously reported in the Company’s SEC filings. Since discovering the misclassifications, the Company has taken corrective actions with respect to the ongoing classification of products and payment of duties.” On these disclosures, Dorman’s stock price fell sharply during intraday trading on February 24, 2020.