dorm-20240928

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_____________________

FORM 10-Q

_____________________

(Mark One)


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 28, 2024


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 0-18914

_____________________

Dorman Products, Inc.

(Exact name of registrant as specified in its charter)

_____________________


Pennsylvania						23-2078856
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

3400 East Walnut Street, Colmar, Pennsylvania						18915
(Address of principal executive offices)						(Zip Code)

(215) 997-1800

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common stock, par value $0.01 per share

DORM

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes o No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). x Yes o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large Accelerated Filer	x	Accelerated filer	o

Non-accelerated filer	o	Smaller reporting company	o

		Emerging growth company	o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). o Yes x No

As of October 29, 2024, the registrant had 30,517,484 shares of common stock, par value $0.01 per share, outstanding.

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DORMAN PRODUCTS, INC.

INDEX TO QUARTERLY REPORT ON FORM 10-Q

September 28, 2024


		Page
PART I — FINANCIAL INFORMATION

ITEM 1.	Financial Statements (unaudited)

	Condensed Consolidated Statements of Operations and Comprehensive Income	3

	Condensed Consolidated Balance Sheets	4

	Condensed Consolidated Statements of Shareholders’ Equity	5

	Condensed Consolidated Statements of Cash Flows	6

	Notes to Condensed Consolidated Financial Statements	7

ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15

ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	25

ITEM 4.	Controls and Procedures	26

PART II — OTHER INFORMATION

ITEM 1.	Legal Proceedings	27

ITEM 1A.	Risk Factors	27

ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27

ITEM 3.	Defaults Upon Senior Securities	28

ITEM 4.	Mine Safety Disclosures	28

ITEM 5.	Other Information	28

ITEM 6.	Exhibits	28

Exhibit Index		29

Signatures		30

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PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements

DORMAN PRODUCTS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME

(UNAUDITED)


	Three Months Ended				Nine Months Ended
(in thousands, except per share data)	September 28, 2024		September 30, 2023		September 28, 2024		September 30, 2023
Net sales	$	503,773	$	488,186	$	1,475,425	$	1,435,492
Cost of goods sold	299,970		304,968		890,775		944,291
Gross profit	203,803		183,218		584,650		491,201
Selling, general and administrative expenses	124,532		119,010		378,489		353,681
Income from operations	79,271		64,208		206,161		137,520
Interest expense, net	9,762		12,215		30,569		36,733
Other income, net	1,615		605		1,711		1,358
Income before income taxes	71,124		52,598		177,303		102,145
Provision for income taxes	15,871		12,076		41,812		23,170
Net income	$	55,253	$	40,522	$	135,491	$	78,975
Other comprehensive income:
Change in foreign currency translation adjustment	651		(1,214)		(967)		(529)
Comprehensive Income	$	55,904	$	39,308	$	134,524	$	78,446

Earnings per share:
Basic	$	1.81	$	1.29	$	4.39	$	2.51
Diluted	$	1.80	$	1.28	$	4.37	$	2.50
Weighted average shares outstanding:
Basic	30,570		31,483		30,888		31,462
Diluted	30,739		31,555		31,019		31,540

See accompanying Notes to Condensed Consolidated Financial Statements

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DORMAN PRODUCTS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)


(in thousands, except for share data)	September 28, 2024		December 31, 2023
Assets
Current assets:
Cash and cash equivalents	$	45,127	$	36,814
Accounts receivable, less allowance for doubtful accounts of $1,647 and $3,518	571,051		526,867
Inventories	665,237		637,375
Prepaids and other current assets	34,661		32,653
Total current assets	1,316,076		1,233,709
Property, plant and equipment, net	165,734		160,113
Operating lease right-of-use assets	107,176		103,476
Goodwill	443,340		443,889
Intangible assets, net	284,138		301,556
Other assets	47,633		49,664
Total assets	$	2,364,097	$	2,292,407
Liabilities and shareholders’ equity
Current liabilities:
Accounts payable	$	205,905	$	176,664
Accrued compensation	27,003		23,971
Accrued customer rebates and returns	208,274		204,495
Revolving credit facility	61,760		92,760
Current portion of long-term debt	18,750		15,625
Other accrued liabilities	39,631		33,636
Total current liabilities	561,323		547,151
Long-term debt	455,038		467,239
Long-term operating lease liabilities	94,294		91,262
Other long-term liabilities	9,203		9,627
Deferred tax liabilities, net	9,637		8,925
Commitments and contingencies (Note 7)
Shareholders’ equity:
Common stock, $0.01 par value; 50,000,000 shares authorized; 30,516,759 and 31,299,770 shares issued and outstanding in 2024 and 2023, respectively	305		313
Additional paid-in capital	110,595		101,045
Retained earnings	1,127,259		1,069,435
Accumulated other comprehensive loss	(3,557)		(2,590)
Total shareholders’ equity	1,234,602		1,168,203
Total liabilities and shareholders' equity	$	2,364,097	$	2,292,407

See accompanying Notes to Condensed Consolidated Financial Statements

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DORMAN PRODUCTS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(UNAUDITED)


	Three Months Ended September 28, 2024
	Common Stock			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total
(in thousands, except share data)	Shares Issued	Par Value
Balance at June 29, 2024	30,765,672	$	308	$	106,714	$	1,098,506	$	(4,208)	$	1,201,320
Exercise of stock options	15,269	—		1,207		—		—		1,207
Compensation expense under incentive stock plans	—	—		3,767		—		—		3,767
Purchase and cancellation of common stock	(276,063)	(3)		(497)		(26,499)		—		(26,999)
Issuance of common stock under incentive stock plans, net of cancellations	17,177	—		—		—		—		—
Other stock-related activity	(5,296)	—		(596)		(1)		—		(597)
Change in foreign currency translation adjustment	—	—		—		—		651		651
Net income	—	—		—		55,253		—		55,253
Balance at September 28, 2024	30,516,759	$	305	$	110,595	$	1,127,259	$	(3,557)	$	1,234,602

	Three Months Ended September 30, 2023
	Common Stock			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total
(in thousands, except share data)	Shares Issued	Par Value
Balance at July 1, 2023	31,488,164	$	315	$	94,452	$	993,923	$	(2,618)	$	1,086,072
Exercise of stock options	460	—		37		—		—		37
Compensation expense under incentive stock plans	—	—		2,901		—		—		2,901
Purchase and cancellation of common stock	(2,010)	—		(3)		(177)		—		(180)
Issuance of common stock under incentive stock plans, net of cancellations	1,419	—		—		—		—		—
Other stock-related activity	(539)	—		(45)		—		—		(45)
Change in foreign currency translation adjustment	—	—		—		—		(1,214)		(1,214)
Net income	—	—		—		40,522		—		40,522
Balance at September 30, 2023	31,487,494	$	315	$	97,342	$	1,034,268	$	(3,832)	$	1,128,093

	Nine Months Ended September 28, 2024
	Common Stock			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total
(in thousands, except share data)	Shares Issued	Par Value
Balance at December 31, 2023	31,299,770	$	313	$	101,045	$	1,069,435	$	(2,590)	$	1,168,203
Exercise of stock options	24,358	—		1,766		—		—		1,766
Compensation expense under incentive stock plans	—	—		10,547		—		—		10,547
Purchase and cancellation of common stock	(867,385)	(9)		(1,561)		(77,569)		—		(79,139)
Issuance of common stock under incentive stock plans, net of cancellations	83,055	1		960		—		—		961
Other stock-related activity	(23,039)	—		(2,162)		(98)		—		(2,260)
Change in foreign currency translation adjustment	—	—		—		—		(967)		(967)
Net income	—	—		—		135,491		—		135,491
Balance at September 28, 2024	30,516,759	$	305	$	110,595	$	1,127,259	$	(3,557)	$	1,234,602

	Nine Months Ended September 30, 2023
	Common Stock			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total
(in thousands, except share data)	Shares Issued	Par Value
Balance at December 31, 2022	31,430,632	$	314	$	88,750	$	956,870	$	(3,303)	$	1,042,631
Exercise of stock options	17,489	—		1,167		—		—		1,167
Compensation expense under incentive stock plans	—	—		8,336		—		—		8,336
Purchase and cancellation of common stock	(11,850)	—		(21)		(987)		—		(1,008)
Issuance of common stock under incentive stock plans, net of cancellations	76,747	1		1,003		—		—		1,004
Other stock-related activity	(25,524)	—		(1,893)		(590)		—		(2,483)
Change in foreign currency translation adjustment	—	—		—		—		(529)		(529)
Net income	—	—		—		78,975		—		78,975
Balance at September 30, 2023	31,487,494	$	315	$	97,342	$	1,034,268	$	(3,832)	$	1,128,093

See accompanying Notes to Condensed Consolidated Financial Statements

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DORMAN PRODUCTS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)


	Nine Months Ended
(in thousands)	September 28, 2024		September 30, 2023
Cash Flows from Operating Activities:
Net income	$	135,491	$	78,975
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation, amortization and accretion	43,015		40,786
Fair value adjustment to contingent consideration	—		(13,400)
Provision for doubtful accounts	74		2,721
Provision for deferred income taxes	694		3,319
Provision for stock-based compensation	10,547		8,407
Changes in assets and liabilities:
Accounts receivable	(44,304)		(59,786)
Inventories	(27,962)		130,156
Prepaids and other current assets	(4,450)		(6,597)
Other assets	(406)		(3,981)
Accounts payable	29,067		(21,615)
Accrued customer rebates and returns	3,784		(101)
Accrued compensation and other liabilities	14,072		(9,774)
Cash provided by operating activities	159,622		149,110
Cash Flows from Investing Activities:
Acquisition, net of cash acquired	—		67
Property, plant and equipment additions	(31,245)		(32,936)
Cash used in investing activities	(31,245)		(32,869)
Cash Flows from Financing Activities:
Payments of revolving credit line	(31,000)		(119,700)


Payments of long-term debt	(9,375)		(9,375)
Payment of deferred acquisition consideration	(200)		—
Proceeds from exercise of stock options	1,766		1,167
Purchase and cancellation of common stock	(79,923)		(1,008)
Other stock-related activity	(1,301)		(1,389)
Cash used in financing activities	(120,033)		(130,305)
Effect of exchange rate changes on Cash and Cash Equivalents	(31)		(17)
Net Increase (Decrease) in Cash and Cash Equivalents	8,313		(14,081)
Cash and Cash Equivalents, Beginning of Period	36,814		46,034
Cash and Cash Equivalents, End of Period	$	45,127	$	31,953
Supplemental Cash Flow Information
Cash paid for interest expense	$	26,865	$	38,613
Cash paid for income taxes	$	39,761	$	27,242

See accompanying Notes to Condensed Consolidated Financial Statements

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DORMAN PRODUCTS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 28, 2024 AND SEPTEMBER 30, 2023

(UNAUDITED)

1. Basis of Presentation

As used herein, unless the context requires otherwise, “Dorman,” the “Company,” “we,” “us,” or “our” refers to Dorman Products, Inc. and its subsidiaries. Our ticker symbol on The Nasdaq Stock Market LLC is “DORM.”

The accompanying unaudited condensed consolidated financial statements have been prepared under U.S. generally accepted accounting principles (“GAAP”) for interim financial information and under the rules and regulations of the U.S. Securities and Exchange Commission. However, they do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of only normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 28, 2024 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2024 or any future period. We may experience significant fluctuations from quarter to quarter in our results of operations due to the timing of orders placed by our customers and the introduction of new products and product lines to customers. These financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

2. Sales of Accounts Receivable

We have entered several customer-sponsored programs administered by unrelated financial institutions that permit us to sell (factor) certain accounts receivable at discounted rates to the financial institutions. Transactions under these agreements were accounted for as sales of accounts receivable and the related accounts receivable were removed from our Condensed Consolidated Balance Sheets at the times of the sales transactions. Sales of accounts receivable under these agreements, and related factoring costs, which were included in selling, general and administrative expenses, were as follows:


	Three Months Ended				Nine Months Ended
(in thousands)	September 28, 2024		September 30, 2023		September 28, 2024		September 30, 2023
Sales of accounts receivable	$	254,657	$	233,513	$	791,413	$	713,190
Factoring costs	11,939		12,255		38,171		37,674

3. Inventories

Inventories include the cost of material, freight, direct labor and overhead utilized in the processing of our products and are stated at the lower of cost or net realizable value. Inventories were as follows:


(in thousands)	September 28, 2024		December 31, 2023
Raw materials	$	28,975	$	29,750
Bulk product	226,419		211,805
Finished product	400,812		387,668
Packaging materials	9,031		8,152
Total	$	665,237	$	637,375

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4. Goodwill and Intangible Assets

Goodwill

Goodwill included the following:


(in thousands)	Light Duty		Heavy Duty		Specialty Vehicle		Consolidated
Balance at December 31, 2023	$	313,704	$	57,876	$	72,309	$	443,889
Foreign currency translation	—		(549)		—		(549)
Balance at September 28, 2024	$	313,704	$	57,327	$	72,309	$	443,340

Intangible Assets

Intangible assets included the following:


	September 28, 2024						December 31, 2023
Intangible assets subject to amortization	Gross Carrying Value		Accumulated Amortization		Net Carrying Value		Gross Carrying Value		Accumulated Amortization		Net Carrying Value
(in thousands)
Customer relationships	$	173,430	$	38,461	$	134,969	$	175,430	$	31,678	$	143,752
Trade names	67,690		13,848		53,842		67,690		10,676		57,014
Product portfolio	107,800		14,702		93,098		107,800		9,720		98,080
Technology	2,167		1,254		913		2,167		1,069		1,098
Patents and other	2,230		914		1,316		2,230		618		1,612
Total	$	353,317	$	69,179	$	284,138	$	355,317	$	53,761	$	301,556

Amortization expense was $6.3 million and $5.5 million during the three months ended September 28, 2024 and September 30, 2023, and $17.4 million and $16.5 million during the nine months ended September 28, 2024 and September 30, 2023, respectively.

5. Debt

As of September 28, 2024 and December 31, 2023, the interest rate on the outstanding borrowings under our credit facility was 6.60% and 6.96%, respectively.

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6. Segment and Geographic Information

Segment results are as follows:


	For the Three Months Ended				For the Nine Months Ended
(in thousands)	September 28, 2024		September 30, 2023		September 28, 2024		September 30, 2023
Net Sales:
Light Duty	$	393,577	$	374,697	$	1,138,228	$	1,076,619
Heavy Duty	59,615		62,841		178,613		199,495
Specialty Vehicle	50,581		50,648		158,584		159,378
Total	$	503,773	$	488,186	$	1,475,425	$	1,435,492

Segment profit:
Light Duty	$	74,632	$	60,457	$	198,339	$	122,917
Heavy Duty	2,660		1,861		5,390		10,595
Specialty Vehicle	8,624		6,840		25,823		23,625
Total	$	85,916	$	69,158	$	229,552	$	157,137

A reconciliation of segment profit to income before income taxes is as follows:


	For the Three Months Ended				For the Nine Months Ended
(in thousands)	September 28, 2024		September 30, 2023		September 28, 2024		September 30, 2023
Segment profit	$	85,916	$	69,158	$	229,552	$	157,137
Acquisition-related intangible assets amortization	(6,173)		(5,485)		(17,138)		(16,336)
Acquisition-related transaction and other costs	(396)		(465)		(1,327)		(14,880)

Pretax reduction in workforce costs	(76)		—		(4,926)		(1,801)
Fair value adjustment to contingent consideration	—		1,000		—		13,400
Interest expense, net	(9,762)		(12,215)		(30,569)		(36,733)
Other income, net	1,615		605		1,711		1,358
Income before income taxes	$	71,124	$	52,598	$	177,303	$	102,145

The following table presents our net sales by geographic region:


	Three Months Ended				Nine Months Ended
(in thousands)	September 28, 2024		September 30, 2023		September 28, 2024		September 30, 2023
Net sales to U.S. customers	$	464,132	$	448,360	$	1,355,501	$	1,317,353
Net sales to non-U.S. customers	39,641		39,826		119,924		118,139
Total	$	503,773	$	488,186	$	1,475,425	$	1,435,492

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7. Commitments and Contingencies

Acquisitions

We have contingent consideration related to acquisitions due to the uncertainty of the ultimate amount of any payments that will become due as earnout payments if performance targets are achieved. If the remaining performance targets for the acquisitions are fully achieved, the maximum additional contingent payments to be made under the transaction documents would be $102.0 million in aggregate.

As of September 28, 2024 and December 31, 2023, we estimated that no such contingent payments are expected to become due in connection with the acquisitions, and therefore accrued no liability.

The contingent consideration liability is measured each reporting period and recorded at fair value. The inputs used to calculate the fair value of the contingent consideration liability are considered to be Level 3 inputs due to the lack of relevant observable market activity and significant management judgment. The approach to valuing the contingent consideration uses unobservable factors such as projected revenues and cost of goods sold over the term of the earnout period, discounted for the period over which the contingent consideration is measured, and volatility rates. Based upon these assumptions, the contingent consideration is then valued using a Monte Carlo simulation. An increase in future revenue and gross profit may result in a higher estimated fair value, while a decrease in future revenue and gross profit may result in a lower estimated fair value of the contingent consideration liability.

Other Contingencies

We are a party to or otherwise involved in legal proceedings that arise in the ordinary course of business, such as various claims and legal actions involving contracts, employment claims, competitive practices, intellectual property infringement, product liability claims and other matters arising out of the conduct of our business. In the opinion of management, none of the actions, individually or in the aggregate, taking into account relevant insurance coverage, would likely have a material financial impact on the Company and we believe the range of reasonably possible losses from current matters, taking into account relevant insurance coverage, is immaterial. However, legal matters are subject to inherent uncertainties and there exists the possibility that the ultimate resolution of any of these matters could have a material adverse impact on the Company’s cash flows, financial position or results of operations in the period in which any such effects are recorded.

8. Stock-Based Compensation

Restricted Stock Awards (“RSAs”) and Restricted Stock Units (“RSUs”)

We grant RSUs, and prior to January 2020 we granted RSAs, to participants in our equity plans. Performance-based RSUs granted in the nine months ended September 28, 2024 included certain grants that vest based on our total shareholder return ranking relative to the Nasdaq US Benchmark Auto Parts Index over a three-year performance period (market condition), and other grants that vest based upon achievement of return on invested capital targets over a three-year performance period (performance condition).

Compensation cost related to RSA and RSU grants was $3.4 million and $2.4 million for the three months ended September 28, 2024 and September 30, 2023, respectively, and $9.1 million and $6.7 million for the nine months ended September 28, 2024 and September 30, 2023, respectively, and was included in selling, general and administrative expenses in the Condensed Consolidated Statements of Operations.

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The following table summarizes our RSA and RSU activity for the nine months ended September 28, 2024:


	Shares	Weighted Average Fair Value
Balance at December 31, 2023	257,554	$	97.33
Granted	187,645	$	98.95
Vested	(72,701)	$	89.90
Canceled	(28,792)	$	112.06
Balance at September 28, 2024	343,706	$	98.56

For the nine months ended September 28, 2024, we granted 32,109 performance-based RSUs containing a market condition with a grant date fair value of $138.58 per share. For the nine months ended September 30, 2023, we granted 29,399 performance-based RSUs containing a market condition with a grant date fair value of $113.15 per share.

As of September 28, 2024, there was $21.7 million of unrecognized compensation cost related to unvested RSA and RSU grants that is expected to be recognized over a weighted average period of 2.1 years.

Stock Options

From time to time, we grant stock options to participants in our equity plans. Compensation cost related to stock option grants was $0.3 million and $0.5 million for the three months ended September 28, 2024 and September 30, 2023, respectively, and $1.1 million and $1.5 million for the nine months ended September 28, 2024 and September 30, 2023, respectively, and was included as selling, general and administrative expenses in the Condensed Consolidated Statements of Operations.

The following table summarizes our stock option activity for the nine months ended September 28, 2024:


	Shares	Weighted Average Price		Weighted Average Remaining Term (years)	Aggregate Intrinsic Value (in thousands)
Balance at December 31, 2023	311,217	$	86.52

Canceled	(10,936)	$	95.80
Exercised	(25,580)	$	72.88
Balance at September 28, 2024	274,701	$	87.42	4.7	$	7,187
Exercisable at September 28, 2024	174,775	$	83.34	4.1	$	5,284

As of September 28, 2024, there was $2.5 million of unrecognized compensation cost related to unvested stock options that is expected to be recognized over a weighted average period of 2.1 years.

Employee Stock Purchase Plan ("ESPP")

During the nine months ended September 28, 2024, we issued 13,555 shares under the ESPP. During the nine months ended September 30, 2023, we issued 14,975 shares under the ESPP.

9. Earnings Per Share

Basic earnings per share was calculated by dividing our net income by the weighted average number of common shares outstanding during the period, excluding unvested RSAs which are considered to be contingently issuable. To calculate diluted earnings per share, common share equivalents are added to the weighted average number of common shares outstanding. Common share

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equivalents are calculated using the treasury stock method and are computed based on outstanding stock-based awards.

For the three months ended September 28, 2024 and September 30, 2023, there were approximately 214,000 shares and 294,000 shares, respectively, and for the nine months ended September 28, 2024 and September 30, 2023 there were approximately 253,000 shares and 295,000 shares, respectively, that were excluded from the calculation of diluted earnings per share because their effect would have been anti-dilutive.

The following table sets forth the computation of basic earnings per share and diluted earnings per share:


	Three Months Ended				Nine Months Ended
(in thousands, except per share data)	September 28, 2024		September 30, 2023		September 28, 2024		September 30, 2023

Net income	$	55,253	$	40,522	$	135,491	$	78,975
Denominator:
Weighted average basic shares outstanding	30,570		31,483		30,888		31,462
Effect of stock-based compensation awards	169		71		131		78
Weighted average diluted shares outstanding	30,739		31,555		31,019		31,540
Earnings Per Share:
Basic	$	1.81	$	1.29	$	4.39	$	2.51
Diluted	$	1.80	$	1.28	$	4.37	$	2.50

10. Common Stock Repurchases

We periodically repurchase, at the then current market price, and cancel common stock issued to the Dorman Products, Inc. 401(k) Retirement Plan and Trust (the “401(k) Plan”). 401(k) Plan participants can no longer purchase shares of Dorman common stock as an investment option under the 401(k) Plan. Shares are generally purchased by the Company from the 401(k) Plan when participants sell units as permitted by the 401(k) Plan or elect to leave the 401(k) Plan upon retirement, termination or other reasons. The following table summarizes the repurchase and cancellation of common stock by the Company for the periods indicated:


	Three Months Ended				Nine Months Ended
	September 28, 2024		September 30, 2023		September 28, 2024		September 30, 2023
Shares repurchased and canceled	2,410		2,010		11,414		11,850
Total cost of shares repurchased and canceled (in thousands)	$	262	$	181	$	1,048	$	1,009
Average price per share	$	108.70	$	89.99	$

SEC Form 10-Q filed by Dorman Products Inc.