Dorman Products (DORM) investor relations material

Business and growth opportunities

• Mobility aftermarket portfolio spans light duty (~80% of sales), heavy duty (~10%) and specialty vehicles (~10%); ~$2B sales and ~150,000 unique SKUs.

• Differentiation centers on identifying failure-prone parts and developing aftermarket-exclusive solutions; shared innovation, supply chain, operations and distribution create synergies across segments.

• Specialty vehicle has a long growth runway following the 2023 SuperATV acquisition, with opportunity to consolidate a fragmented market; heavy duty targets OE-controlled aftermarket share with quality parts at lower cost.

• North American repair-opportunity funnel is at a historical high, with high-dollar failures on newer vehicles expected to support future aftermarket demand.

• Core vehicle-age sweet spot is 7–14 years; parts are targeted early in their failure cycle to capture demand across a vehicle’s remaining life.

Product development and operating model

• Ideation combines input from 4,000 independent repair technicians, shop visits, ASE-certified support staff, blogs, dealers, purchased parts and customer missed-lookup reports.

• Ideas move through an ROI-based funnel that assesses failure mode and vehicle applications before design and development.

• Complex electronics with embedded software and vehicle-network connectivity have been in development for 12–15 years; these products represent a growing share of future repair opportunities.

• Asset-light sourcing across 200+ light-duty categories supports rapid shifts as technology changes; selective in-house manufacturing is used for protected IP, difficult-to-source products and large heavy-duty parts.

• Specialty vehicle teams aim to be first to market with parts for new machines; some products reach market within a week of identifying an opportunity.

Demand, tariffs and execution

• Portfolio skews toward professional, non-discretionary DIFM repairs; DIFM performance was stronger this year, while inflation pressured DIY consumers, often owners of 13-year-old vehicles with household income of $75,000 or less.

• Deferred maintenance is affecting some DIY-focused items; historically, delayed repairs return later, often with a higher price tag.

• Supplier footprint is more diversified than in 2018; remaining auto-part and Section 232 steel and aluminum tariffs are viewed as manageable, with tariffs generally passed through dollar for dollar.

• Prices were reduced as tariff exposure declined, while final prices charged to vehicle repairers remain outside management’s control.

• A new COO role sharpened focus on supply chain and operations; automation and productivity improvements remain in progress and have helped offset costs.