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

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. ☒ Yes ☐ 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). ☒ Yes ☐ 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.

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. ☐

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

As of April ~~29, 2019,~~23, 2020, the registrant had ~~32,936,681~~32,443,271 shares of common stock, par value $0.01 per share, outstanding.

	Thirteen Weeks Ended				Thirteen Weeks Ended
(in thousands, except per share data)	March 30, 2019		March 31, 2018		March 28, 2020		March 30, 2019
Net sales	$	243,791	$	227,262	$	257,730	$	243,791
Cost of goods sold		156,299		138,627		172,933		156,299
Gross profit		87,492		88,635		84,797		87,492
Selling, general and administrative expenses		57,750		48,641		59,735		57,750
Income from operations		29,742		39,994		25,062		29,742
Other income, net		29		152		2,631		29
Income before income taxes		29,771		40,146		27,693		29,771
Provision for income taxes		6,364		9,499		4,918		6,364
Net income	$	23,407	$	30,647	$	22,775	$	23,407
Earnings Per Share:
Basic	$	0.71	$	0.93	$	0.70	$	0.71
Diluted	$	0.71	$	0.93	$	0.70	$	0.71
Weighted Average Shares Outstanding:
Basic		32,801		32,917		32,354		32,801
Diluted		32,889		33,003		32,426		32,889

(in thousands, except for share data)	March 30, 2019		December 29, 2018		March 28, 2020		December 28, 2019
Assets
Current assets:
Cash and cash equivalents	$	40,794	$	43,458	$	161,778	$	68,353
Accounts receivable, less allowance for doubtful accounts and customer credits of $90,790 and $91,531		297,509		310,114
Accounts receivable, less allowance for doubtful accounts of $1,063 and $957						423,301		391,810
Inventories		288,862		270,504		258,371		280,813
Prepaids and other current assets		7,409		5,652		10,810		13,614
Total current assets		634,574		629,728		854,260		754,590
Property, plant and equipment, net		101,395		98,647		99,082		101,837
Operating lease right-of-use assets		34,819		-		32,230		32,198
Goodwill		72,601		72,606		91,275		74,458
Intangible assets, net		24,663		25,164		27,748		21,305
Deferred tax asset, net		6,230		6,228		3,886		4,336
Other assets		53,200		55,184		44,303		52,348
Total	$	927,482	$	887,557	$	1,152,784	$	1,041,072
Liabilities and shareholders’ equity
Current liabilities:
Accounts payable	$	98,281	$	109,096	$	73,283	$	90,437
Accrued compensation		6,273		14,515		9,339		9,782
Accrued customer rebates and returns						110,374		105,903
Revolving credit line						99,000		-
Other accrued liabilities		29,362		17,979		22,541		14,380
Total current liabilities		133,916		141,590		314,537		220,502
Long-term operating lease liabilities		32,856		-		29,714		29,730
Other long-term liabilities		14,211		13,550		13,298		13,297
Deferred tax liabilities, net		4,792		4,794		3,860		3,959
Commitments and contingencies
Shareholders’ Equity:
Common stock, par value $0.01; authorized 50,000,000 shares; issued and outstanding 32,942,013 and 33,004,861 in 2019 and 2018, respectively		329		330
Common stock, par value $0.01; authorized 50,000,000 shares; issued and outstanding 32,434,665 and 32,558,168 in 2020 and 2019, respectively						325		326
Additional paid-in capital		49,890		47,861		53,454		52,605
Retained earnings		691,488		679,432		737,596		720,653
Total shareholders’ equity		741,707		727,623		791,375		773,584
Total	$	927,482	$	887,557	$	1,152,784	$	1,041,072

	Thirteen Weeks Ended March 28, 2020
	Common Stock						Additional
(in thousands, except share data)	Shares Issued			Par Value			Paid-In Capital			Retained Earnings			Total
Balance at December 28, 2019		32,556,263		$	326		$	52,605		$	720,653		$	773,584
Exercise of stock options		10			—			—			—			—
Compensation expense under Incentive Stock Plan		—			—			1,214			—			1,214
Purchase and cancellation of common stock		(96,709	)		(1	)		(175	)		(5,604	)		(5,780	)
Issuance of non-vested stock, net of cancellations		(21,974	)		—			—			—			—
Other stock related activity, net of tax		(2,925	)		—			(190	)		(228	)		(418	)
Net income		—			—			—			22,775			22,775
Balance at March 28, 2020		32,434,665		$	325		$	53,454		$	737,596		$	791,375

	Thirteen Weeks Ended March 30, 2019
	Common Stock						Additional
(in thousands, except share data)	Shares Issued			Par Value			Paid-In Capital			Retained Earnings			Total
Balance at December 29, 2018		33,004,861		$	330		$	47,861		$	679,432		$	727,623
Exercise of stock options		11,714			—			31			—			31
Compensation expense under Incentive Stock Plan		—			—			915			—			915
Purchase and cancellation of common stock		(115,090	)		(1	)		(207	)		(9,427	)		(9,635	)
Issuance of non-vested stock, net of cancellations		48,193			—			—			—			—
Other stock related activity, net of tax		(7,665	)		—			1,290			(1,924	)		(634	)
Net income		—			—			—			23,407			23,407
Balance at March 30, 2019		32,942,013		$	329		$	49,890		$	691,488		$	741,707

Thirteen Weeks Ended March 30, 2019

Common Stock

Additional

(in thousands, except share data)

Shares
Issued

Par
Value

Paid-In
Capital

Retained
Earnings

Total

Balance at December 29, 2018

33,004,861

$
330

$
47,861

$
679,432

$
727,623

Exercise of stock options

11,714

—

31

—

31

Compensation expense under Incentive Stock Plan

—

—

915

—

915

Purchase and cancellation of common stock

(115,090
)

(1
)

(207
)

(9,427
)

(9,635
)
Issuance of non-vested stock, net of cancellations

48,193

—

—

—

-

Other stock related activity, net of tax

(7,665
)

—

1,290

(1,924
)

(634
)
Net income

—

—

—

23,407

23,407

Balance at March 30, 2019

32,942,013

$
329

$
49,890

$
691,488

$
741,707

Thirteen Weeks Ended March 29, 2018

Common Stock

Additional

(in thousands, except share data)

Shares
Issued

Par
Value

Paid-In
Capital

Retained
Earnings

Total

Balance at December 30, 2017

33,571,524

$
336

$
44,812

$
589,659

$
634,807

Compensation expense under Incentive Stock Plan

—

—

898

—

898

Purchase and cancellation of common stock

(131,750
)

(2
)

(237
)

(8,969
)

(9,208
)
Issuance of non-vested stock, net of cancellations

66,441

1

607

—

608

Other stock related activity, net of tax

(2,716
)

—

(614
)

—

(614
)
Net income

—

—

—

30,647

30,647

Balance at March 31, 2018

33,503,499

$
335

$
45,466

$
611,337

$
657,138

	Thirteen Weeks Ended						Thirteen Weeks Ended
(in thousands)	March 30, 2019			March 31, 2018			March 28, 2020			March 30, 2019
Cash Flows from Operating Activities:
Net income	$	23,407		$	30,647		$	22,775		$	23,407
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation, amortization and accretion		7,265			6,378			7,496			7,265
Provision for non-cash stock compensation		915			851
Operating lease right-of-use assets amortization		1,507			-
Gain on equity method investment								(2,498	)		-
Provision for doubtful accounts								14			-
Benefit for deferred income taxes								(912	)		-
Provision for stock-based compensation								1,214			915
Changes in assets and liabilities:
Accounts receivable		12,611			(8,880	)		(29,491	)		13,333
Inventories		(18,184	)		6,309			28,016			(18,184	)
Prepaids and other current assets		(3,685	)		(1,550	)		2,262			(3,685	)
Other assets		418			35			(2,219	)		1,925
Accounts payable		(11,091	)		(16,519	)		(19,346	)		(11,091	)
Accrued customer rebates and returns								4,471			(497	)
Accrued compensation and other liabilities		3,268			2,480			6,808			3,043
Cash provided by operating activities		16,431			19,751			18,590			16,431
Cash Flows from Investing Activities:
Acquisition, net of cash acquired								(14,462	)		-
Property, plant and equipment additions		(8,838	)		(6,276	)		(3,505	)		(8,838	)
Cash used in investing activities		(8,838	)		(6,276	)		(17,967	)		(8,838	)
Cash Flows from Financing Activities:
Net proceeds of revolving credit line								99,000			-
Other stock related activity		(622	)		(563	)		(418	)		(622	)
Purchase and cancellation of common stock		(9,635	)		(9,208	)		(5,780	)		(9,635	)
Cash used in financing activities		(10,257	)		(9,771	)
Effect of exchange rate changes on Cash and Cash Equivalents		-			(51	)
Net (Decrease) Increase in Cash and Cash Equivalents		(2,664	)		3,653
Cash provided by (used in) financing activities								92,802			(10,257	)
Net Increase (Decrease) in Cash and Cash Equivalents								93,425			(2,664	)
Cash and Cash Equivalents, Beginning of Period		43,458			71,691			68,353			43,458
Cash and Cash Equivalents, End of Period	$	40,794		$	75,344		$	161,778		$	40,794
Supplemental Cash Flow Information
Cash paid for interest expense	$	61		$	66		$	20		$	61
Cash paid for income taxes	$	74		$	295		$	62		$	74

FOR THE THIRTEEN WEEKS ENDED MARCH ~~30, 2019~~28, 2020 AND MARCH ~~31, 2018~~30, 2019

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

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the U.S. for interim financial information and in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). However, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles 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 thirteen weeks ended March ~~30, 2019~~28, 2020 are not necessarily indicative of the results that may be expected for the fiscal year ending ~~December 28, 2019.~~2020 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. The introduction of new products and product lines to customers may cause significant fluctuations from quarter to quarter. 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 28, 2019.

Certain prior year amounts have been reclassified to conform with current year presentation.

During the quarter ended June 29, ~~2018.~~2019, we identified and corrected an immaterial error that affected previously issued consolidated financial statements. This error related to the application of Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers, related to the balance sheet classification of accrued customer rebates and returns that are recognized in connection with sales of our products. We adopted this ASU on December 31, 2017, the beginning of our 2018 fiscal year. We previously recorded accrued customer rebates and returns that were expected to be issued as credits to our customers as a valuation account which offset accounts receivable. Accrued customer rebates and returns are now recorded as a current liability.

Previously issued comparative financial statements, which were revised to correct the error noted above, are presented as “As Revised” in the tables presented in the following footnotes.

Additionally, as a result of the adoption of ASU No. 2014-09, the Company should have disclosed the initial impact to the balance sheet reclassification for accrued customer rebates and returns from accounts receivable, net to accrued customer rebates and returns. The cumulative effect of the changes to the consolidated balance sheet from the adoption was as follows:

The correction of this error did not impact our Consolidated Statements of Operations or our Consolidated Statements of Shareholder’s Equity in any period presented.

On ~~August 31, 2018,~~January 2, 2020, we acquired ~~100%~~the remaining 60% of the outstanding stock of ~~Flight Systems Automotive Group LLC~~Power Train Industries, Inc. (“~~Flight Systems” or “Flight”~~PTI”), a privately-held ~~manufacturer and remanufacturer~~supplier of ~~complex~~parts to the automotive ~~electronics and diesel fuel system components,~~aftermarket, based in ~~Lewisberry, Pennsylvania.~~Reno, Nevada. The total consideration paid for PTI was approximately $30.8 million, which included $18.0 million paid for the remaining 60% of the outstanding stock, $0.5 million deferred payment, subject to customary purchase price adjustments, and $12.3 million which represents the fair value of the previously held 40% equity interest in PTI that was ~~$27.5 million.~~acquired by the Company in 2016. As a result of the acquisition, we recorded a gain of approximately $2.5 million in Other Income in the thirteen weeks ended

March 28, 2020, as a result of the increase in fair value of the previously owned 40% interest in PTI. We ~~believe complex electronics and diesel fuel system components represent important growth opportunities~~previously accounted for ~~us and Flight’s product portfolio delivers valuable alternatives to aftermarket professionals.~~our 40% interest as an equity-method investment.

The transaction was accounted for as a business combination under the acquisition method of accounting. Accordingly, the assets acquired, and liabilities assumed were recorded at fair value, with the remaining purchase price recorded as goodwill.

In connection with this acquisition, we ~~preliminary~~ recorded ~~$5.5~~$16.8 million in goodwill, ~~$5.3~~$7.3 million of identified intangibles, and ~~$16.7~~$6.7 million of other assets, net, ~~assets,~~ primarily $3.5 million of cash, $2.0 million of accounts receivable, ~~$9.1~~$5.6 million of inventory, ~~$4.4 million of fixed assets,~~ and ~~$1.2 million~~($4.4 million) of net other assets and liabilities. The estimated fair value of the Flight assets acquired and liabilities assumed are provisional as of March 30, 2019 and are based on information that is currently available to the Company. Additional information about conditions that existed as of the date of acquisition are being gathered to finalize these provisional measurements, particularly with respect to net working capital, intangible assets, deferred income taxes and tax liabilities. Accordingly, the measurement of Flight’s assets acquired and liabilities assumed may change significantly upon finalization of the Company’s valuations and completion of the purchase price allocation, both of which are expected to occur no later than one year from the acquisition date.

The valuation of the intangible assets acquired and related amortization periods are as follows:

(in thousands)	Valuation		Amortization Period (in years)		Valuation		Amortization Period (in years)
Customer relationships	$	3,080		8	$	4,600		15
Tradenames		1,990	15			700		5
Technology						1,800		8
Other		240		5		190		5
Total	$	5,310			$	7,290

The ~~preliminary~~ fair values of the Customer relationships and Tradenames were estimated using a discounted present value income approach.

The goodwill recognized is attributable primarily to strategic and synergistic opportunities related to existing automotive aftermarket businesses, the assembled workforce of ~~Flight~~PTI and other factors. The goodwill is not expected to be deductible for tax purposes.

The financial results of the acquisition have been included in the Consolidated Financial Statements since the date of acquisition.

On October 26, 2017, we acquired 100% of the outstanding stock of MAS Automotive Distribution Inc. (“MAS”), a privately-held manufacturer of premium chassis and control arms based in Montreal, Canada. The purchase price was $67.2 million net of $3.3 million of cash acquired and including contingent consideration and other purchase price adjustment. The fair value of the contingent cash consideration was estimated by using an option pricing model framework, which represents our own assumptions and data, and is based on our best available information. As of March 30, 2019, we had $8.1 million recorded which represent the fair value of the estimated payment which will become due if certain sales thresholds are achieved through December 2020. Accretion expense was $0.1 million in each of the thirteen weeks ended March 30, 2019 and March 31, 2018, which was included in selling, general and administrative expenses in the Consolidated Statements of Income.

We have entered into several customer sponsored programs administered by unrelated financial institutions that permit us to sell 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 Consolidated Balance Sheet at the time of the sales transactions. Pursuant to these agreements, we sold ~~$172.8~~ $151.3million and ~~$151.0~~$172.8 million of accounts receivable during the thirteen weeks ended March 28, 2020, and March 30, 2019 ~~and March 31, 2018,~~ respectively. All of our credit terms with our customers are less than one year. If receivables had not been sold over the ~~last~~previous twelve months, ~~$418.1~~$375.7 million and ~~$378.5~~$437.9 million of additional accounts receivable would have been outstanding at March ~~30, 2019~~28, 2020 and December ~~29, 2018,~~28, 2019, respectively, based on standard payment terms. Selling, general and administrative expenses for the thirteen weeks ended March 28, 2020 and March 30, 2019 ~~and March 31, 2018~~ included ~~$4.6~~$2.8 million and ~~$3.5~~$4.6 million, respectively, in financing costs associated with these accounts receivable sales programs. See Note 17 for information regarding our increasing the level of receivables collected under factoring programs in light of the COVID-19 pandemic.

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)	March 30, 2019		December 29, 2018		March 28, 2020		December 28, 2019
Bulk product	$	113,876	$	122,111	$	101,118	$	114,308
Finished product		170,610		144,897		152,632		161,866
Packaging materials		4,376		3,496		4,621		4,639
Total	$	288,862	$	270,504	$	258,371	$	280,813

~~As discussed in Note 15, we~~We adopted ASU No. 2016-02, Leases, on December 30, 2018, the beginning of our fiscal 2019, using the modified retrospective approach. 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 and to obtain substantially all of the economic benefit from the use of the underlying asset. Some of our leases ~~included~~include both lease and non-lease components which are accounted for as a single lease component as we have elected the practical expedient. Some of our operating lease agreements include variable lease costs, primarily taxes, insurance, common area maintenance or increases in rental costs related to inflation. Substantially all of our equipment leases and some of our real estate leases have terms of less than one year and, as such, are accounted for as short-term leases as we have elected the practical expedient.

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 ~~preset~~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. Operating lease payments are recognized on a straight-line basis over the lease term. We had no0 financing leases as of March ~~30, 2019.~~28, 2020.

We have operating leases for distribution centers, sales offices and certain warehouse and office equipment. Our leases have remaining lease terms of 1 to 1211 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.

As of March ~~30, 2019,~~28, 2020, there ~~was~~were no material variable lease costs or sublease income. Cash paid for operating leases was $1.9 million and $1.2 million in the thirteen weeks ended March 28, 2020 and March 30, ~~2019.~~2019, respectively, which is classified in operating activities. The following table summarizes the lease expense for the thirteen weeks ended March 28, 2020 and March 30, ~~2019:~~2019


(in thousands)	Thirteen Weeks Ended March 30, 2019		March 28, 2020		March 30, 2019
Operating lease expense	$	1,928	$	1,901	$	1,928
Short-term lease expense		1,070		1,114		1,070
Total lease expense	$	2,998	$	3,015	$	2,998

Supplemental balance sheet information related to our operating leases is as follows:

(in thousands)	March 30, 2019			March 28, 2020
Operating lease right-of-use assets	$	34,819		$	32,230

Other current liabilities	$	4,261
Other accrued liabilities				$	5,412
Long-term operating lease liabilities		32,856			29,714
Total operating lease liabilities	$	37,117		$	35,126

Weighted average remaining lease term (years)		9.91			9.16
Weighted average discount rate		5.18	%		5.18	%

The following table summarizes the maturities of our lease liabilities for all operating leases as of March ~~30, 2019:~~28, 2020:

For the year ended December 29, 2018, minimum rental payments under operating leases are recognized on a straight-line basis over the term of the lease including any periods of free rent. Rent expense for operating leases, including payments for short-term equipment and storage rentals, was $6.9 million in fiscal 2018. Minimum future rental payments required under operating leases in effect as of December 29, 2018 were as follows:

(in thousands)	December 29, 2018		March 28, 2020
2019	$	5,489
2020		5,416
2020 (Remainder of 2020)			$	4,357
2021		4,972		5,476
2022		4,599		5,004
2023		3,013		3,388
2024 and thereafter		24,297
Total rental payments	$	47,786
2024				3,451
2025 and thereafter				21,514
Total lease payments				43,190
Less: Imputed interest				(8,064	)
Present value of lease liabilities			$	35,126

(in thousands)	March 30, 2019			December 29, 2018			March 28, 2020		December 28, 2019
Balance at beginning of period	$	72,606		$	65,999		$	74,458	$	72,606
Goodwill acquired		-			6,800			16,817		-
Measurement period adjustments		(5	)		(193	)		-		1,852
Balance at end of period	$	72,601		$	72,606		$	91,275	$	74,458

			March 30, 2019						December 29, 2018								March 28, 2020						December 28, 2019
(in thousands)	Weighted Average Amortization Period		Gross Carrying Value		Accumulated Amortization		Net Carrying Value		Gross Carrying Value		Accumulated Amortization		Net Carrying Value		Weighted Average Amortization Period		Gross Carrying Value		Accumulated Amortization		Net Carrying Value		Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Intangible assets subject to amortization
Tradenames		13.8	$	7,590	$	531	$	7,059	$	7,590	$	516	$	7,074		11.2	$	6,760	$	1,128	$	5,632	$	6,060	$	975	$	5,085
Customer relationships		8.7		20,130		3,050		17,080		20,130		2,582		17,548		9.3		25,050		5,310		19,740		20,450		4,698	$	15,752
Technology		12.8		367		55		312		367		49		318		8.3		2,167		135		2,032		367		74	$	293
Other		4.4		240		28		212		240		16		224		4.1		430		86		344		240		65	$	175
Total			$	28,327	$	3,664	$	24,663	$	28,327	$	3,163	$	25,164			$	34,407	$	6,659	$	27,748	$	27,117	$	5,812	$	21,305

Amortization expense was ~~$0.7~~$0.8 million and ~~$0.5~~$0.7 million for the thirteen weeks ended March 28, 2020 and March 30, 2019, ~~and March 31, 2018,~~ respectively.

In December 2017, we entered into a credit agreement which will expire in December 2022. This agreement provides for an initial revolving credit facility of $100.0 million and, subject to certain requirements, gives us the ability to request increases of up to an incremental $100.0 million. The credit agreement replaced our previous $30.0 million facility. Borrowings under the credit agreement are on an unsecured basis. At the Company’s election, the interest rate applicable to borrowings under the credit agreement will be either (1) the Prime Rate as announced by Wells Fargo from time to time, (2) an Adjusted LIBOR Market Index Rate as measured by the LIBOR Market Index Rate plus the Applicable Margin which fluctuates between 65 basis points and 125 basis points based on the ratio of the Company’s Consolidated Funded Debt to Consolidated EBITDA, or (3) an Adjusted LIBOR Rate as measured by the LIBOR Rate plus the Applicable Margin which fluctuates between 65 basis points and 125 basis points based on the ratio of the Company’s Consolidated Funded Debt to Consolidated EBITDA. The interest rate at March 28, 2020 was LIBOR plus 65 basis points (1.64%). During the occurrence and continuance of an event of default, all outstanding revolving credit loans will bear interest at a rate per annum equal to 2.00% in excess of the greater of (1) the Prime Rate or (2) the Adjusted LIBOR Market Index Rate then applicable. As of March 28, 2020, we were 0t in default in respect to the credit agreement. The credit agreement also contains covenants, including those related to the ratio of certain consolidated fixed charges to consolidated EBITDA, capital expenditures, and share repurchases, each as defined by the credit agreement. The credit agreement also requires us to pay a fee of 0.10% on the average daily unused portion of the facility, provided the fee will not be charged on the first $30 million of the revolving credit facility.

On March 23, 2020, Dorman took proactive steps to increase its cash position and preserve financial flexibility in light of uncertainties from the COVID-19 pandemic by drawing down $99.0 million from the revolving credit facility. See Note 17 for additional information regarding our response to COVID-19.

As of March 28, 2020, we had $99.0 million in borrowings under the credit agreement, which amount does not include 2 outstanding letters of credit for approximately $0.8 million in the aggregate which were issued to secure ordinary course of business transactions. Net of these borrowings and letters of credit, we had approximately $0.2 million available under the credit agreement at March 28, 2020.

In addition to the foregoing, and, subject to certain requirements, the credit agreement gives the Company the ability to request increases in revolving credit commitments of up to an additional $100.0 million.

During 2019, we informed United States Customs & Border Protection (“CBP”) that we were commencing a voluntary disclosure process with CBP where we would voluntarily disclose to CBP certain product misclassifications and reimburse CBP for any resulting underpayment of duties that were identified as part of a voluntary internal review conducted by the Company. As of the date of this filing, our internal review is substantially complete. The Company recorded an estimated liability of $2.8 million in its Statement of Operations for the year ended December 28, 2019, which represents the Company’s estimated underpayment of duties, after deducting its estimated overpayment of duties, to CBP due to misclassifications over the prior five-year period, which is the applicable statute of limitations, plus applicable interest. The estimated liability of $2.8 million is reported in Other Long-Term Liabilities on the Consolidated Balance Sheet at March 28, 2020. The liability is reported in Other Long-Term liabilities since the ultimate resolution of the misclassifications with CBP is uncertain and is not expected to be resolved within the next twelve months.

We expect to complete our internal review and make our initial prior disclosure submission to CBP in the first six months of 2020. However, the process of finalizing our prior disclosure with CBP may be iterative. We intend to work cooperatively with CBP in connection with the prior disclosure process and expect to complete the prior disclosure process with CBP and pay all required amounts within 18 months of our initial prior disclosure submission.

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 and results of operations in the period in which any such effects are recorded.

The ~~Financial Accounting Standards Board (“FASB”)~~FASB issued ~~an accounting standard update~~ASU No. 2014-09, Revenue from Contracts with Customers, in May 2014 regarding the accounting for and disclosure of revenue. Specifically, the update outlined a single comprehensive model for entities to use in accounting for revenue arising from contracts with ~~customers, which is common to both U.S. GAAP and International Financial Reporting Standards.~~

Our primary source of revenue is from contracts with and purchase orders from customers. Revenue is recognized from product sales when goods are shipped, title and risk of loss and control have been transferred to the customer, and collection is reasonably assured. We estimate the transaction price at the inception of a contract or upon fulfilling a purchase order, including any variable consideration, and will update the estimate for changes in circumstances. We utilize the most likely amount method consistently to estimate the effect of uncertainty on the amount of variable consideration to which we would be entitled. The most likely amount method considers the single most likely amount from a range of possible consideration amounts. This method is utilized for all of our variable consideration.

We record estimates for cash discounts, product returns, promotional rebates, core (i.e. remanufactured parts) return deposits and other discounts in the period the related product revenue is recognized (“~~Customer Credits”~~customer rebates and returns”). The provision for ~~Customer Credits~~customer rebates and returns is recorded as a reduction ~~from~~of gross ~~sales~~sales. Beginning with our Form 10-Q for the period ended June 29, 2019, our obligation associated with customer rebates and ~~reserves for Customer Credits are shown~~returns is classified as a ~~reduction of accounts receivable. Accrued~~current liability on our consolidated balance sheets (“accrued customer rebates ~~which we expect~~and returns”). We have revised prior period balances to ~~settle in cash are classified as other accrued liabilities.~~conform with this presentation. Please refer to Note 1. Actual ~~Customer Credits~~customer rebates and returns have not differed materially from estimated amounts for each period presented. Amounts billed to customers for shipping and handling are included in net sales. Costs associated with shipping and handling are included in cost of goods sold. We have concluded that our estimates of variable consideration are not constrained according to the definition of the new standard.

All of our revenue was recognized under the point of time approach in accordance with the revenue standard during the thirteen weeks ended March ~~30, 2019~~28, 2020 and March ~~31, 2018,~~30, 2019, respectively. Also, we do not have significant financing arrangements with our customers, as our credit terms are all less than one year. Lastly, we do not receive noncash consideration (such as materials or equipment) from our customers to facilitate the fulfillment of our contracts.

We apply the FASB’s guidance on revenue recognition, which requires us to recognize the amount of revenue and consideration which we expect to receive in exchange for goods or services transferred to our customers. To do this, we apply the five-step model prescribed by the FASB, which requires us to: (i) identify the contract with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when, or as, we satisfy a performance obligation.

We recognize a receivable or contract asset when we perform a service or transfer a good in advance of receiving consideration.

- A receivable is recorded when our right to consideration is unconditional and only the passage of time is required before payment of that consideration is due.

- A contract asset is recorded when our right to consideration in exchange for goods or services that we have transferred to a customer is conditional on something other than the passage of time. We did ~~not~~0t have any contract assets recorded as of March ~~30, 2019~~28, 2020 or December ~~29, 2018.~~28, 2019.

We recognize a contract liability when we receive consideration, or if we have the unconditional right to receive consideration, in advance of satisfying the performance obligation. A contract liability is our obligation to transfer goods or services to a customer for which we have received consideration, or an amount of consideration is due from the customer. We did ~~not~~0t have any contract liabilities recorded as of March ~~30, 2019~~28, 2020 or December ~~29, 2018.~~28, 2019.

The following tables present our disaggregated net sales by Type of Major Good / Product Line, and Geography.

	Thirteen Weeks Ended				Thirteen Weeks Ended
(in thousands)	March 30, 2019		March 31, 2018		March 28, 2020		March 30, 2019
Powertrain	$	95,163	$	95,152	$	108,142	$	95,163
Chassis		77,406		66,999		73,375		77,406
Automotive Body		60,746		55,244
Automotive body						64,632		60,746
Hardware		10,476		9,867		11,581		10,476
Net Sales	$	243,791	$	227,262

Net sales					$	257,730	$	243,791

On May 16, 2018, our shareholders approved our 2018 Stock Option and Stock Incentive Plan (the “2018 Plan” ~~or the “Plan”~~), which supersedes our 2008 Stock Option and Stock Incentive ~~Plan. All future stock compensation grants will be issued under the 2018 Plan.~~Plan (the “2008 Plan”). Under the terms of the 2018 Plan, our Board of Directors may grant up to 1,200,000 shares of common stock in the form of shares of restricted stock, restricted stock units, stock appreciation rights, ~~and~~ stock options, or combinations thereof, to officers, directors, employees, ~~important~~ consultants and advisors. Grants under the 2018 Plan must be made within ten years of the date the Plan was approved. Stock options are exercisable upon the terms set forth in each grant agreement, ~~approved by the Board of Directors,~~ but in no event more than ten years from the date of grant. Restricted stock and restricted stock units vest in accordance with the terms set forth in each applicable award ~~agreement approved by our Board of Directors.~~agreement. At March ~~30, 2019, 1,085,954~~28, 2020, 885,847 shares were available for grant under the 2018 Plan.

~~We grant restricted stock to certain employees and members of our Board of Directors.~~ Vesting of restricted stock and RSU awards is conditional based on continued employment or service for a specified period and, in certain circumstances, the attainment of performance goals. WeWith respect to restricted stock and RSU awards, we retain the ~~restricted stock,~~shares underlying the award, and any dividends paid thereon, until the vesting conditions have been met. For time-based restricted stock and RSU awards, compensation cost related to the stock is recognized on a straight-line basis over the vesting period and is calculated using the closing price per share of our common stock on the grant date. For performance-based restricted stock and RSU awards tied to growth in adjusted pre-tax income, compensation cost related to the ~~stock~~award is recognized over the performance period and is calculated using the closing price per share of our common stock on the grant date and an estimate of the probable outcome of the performance ~~conditions. In~~conditions at each reporting date. Since 2019, we ~~introduced performance shares~~have granted performance-based restricted stock and RSU awards that vest based on our total shareholder return ranking relative to the S&P ~~Midcap~~Mid-Cap 400 Growth Index over a three-year performance period. For performance-based restricted stock and RSU awards tied to total shareholder return, compensation cost related to the ~~stock~~award is recognized on a straight-line basis over the performance period and is calculated using the simulated fair value per share of our common stock based on the application of a Monte Carlo simulation model. Compensation cost related to restricted stock and RSU awards was $1.0 million and $0.7 million for the thirteen weeks ended March 28, 2020 and March 30, 2019 ~~and March 31, 2018~~respectively, and is classified as selling, general and administrative expense in the Consolidated Statements of ~~Income.~~Operations.

The following table summarizes our restricted stock and RSU award activity for the thirteen weeks ended March ~~30, 2019:~~28, 2020:

	Shares			Weighted Average Price		Shares			Weighted Average Price
Balance at December 29, 2018		170,737		$	63.94
Balance at December 28, 2019							177,491		$	76.70
Granted		74,879		$	82.11		72,369		$	61.68
Vested		(24,849	)	$	50.81		(14,399	)	$	65.13
Cancelled		(26,972	)	$	48.23		(22,488	)	$	78.67
Balance at March 30, 2019		193,795		$	74.83
Balance at March 28, 2020							212,973		$	72.17

As of March ~~30, 2019,~~28, 2020, there was ~~$7.9~~$10.3 million of unrecognized compensation cost related to unvested restricted stock ~~which~~and RSU awards that is expected to be recognized over a weighted-average period of approximately ~~2.9~~2.8 years.

Cash flows resulting from tax deductions in excess of the tax effect of compensation cost recognized in the financial statements are classified as operating cash flows. The excess tax benefit generated from restricted stock ~~which~~and RSU awards that vested was ~~$0.2~~$0.1 million and ~~$0.1~~$0.2 million in the thirteen weeks ended March ~~30, 2019~~28, 2020 and March ~~31, 2018,~~30, 2019, respectively, and was credited to income tax expense.

~~We grant stock options to certain employees.~~ We expense the grant-date fair value of stock options. Compensation cost is recognized on a straight-line basis over the vesting period for which related services are performed. The compensation cost charged against income was $0.2 million ~~and $0.1 million~~ for each of the thirteen weeks ended March ~~30, 2019~~28, 2020 and March ~~31, 2018, respectively.~~30, 2019. The compensation costs were classified as selling, general and administrative expense in the Consolidated Statements of ~~Income. No~~Operations. NaN cost was capitalized during the thirteen weeks ended March ~~30, 2019.~~28, 2020.

We use the Black-Scholes option valuation model to estimate the fair value of stock options granted. Expected volatility and expected dividend yield are based on the actual historical experience of our common stock. The expected life represents the period of time that options granted are expected to be outstanding and was calculated using historical option exercise data. The risk-free rate was based on a U.S. Treasury security with terms equal to the expected time of exercise as of the grant date. During the thirteen weeks ended March 28, 2020 and March 30, 2019, ~~and March 31, 2018~~ we granted ~~28,538~~98,974 and ~~61,514~~28,538 stock options, respectively.

The following table summarizes our stock option activity for the thirteen weeks ended March ~~30, 2019:~~28, 2020:

Shares

Weighted
Average
Exercise
Price

Weighted
Average
Remaining
Term
(In years)

Aggregate
Intrinsic
Value

Balance at December 29, 2018

188,469

$
66.14

Granted

28,538

$
82.56

Exercised

(33,228
)

$
58.81

Balance at March 30, 2019

183,779

$
70.01

4.1

$
3,321,984

Options exercisable at March 30, 2019

61,415

$
62.01

2.7

$
1,601,664

	Shares			Weighted Average Exercise Price		Weighted Average Remaining Term (In years)		Aggregate Intrinsic Value
Balance at December 28, 2019		181,712		$	70.78
Granted		98,974		$	61.86
Exercised		(419	)	$	72.55
Balance at March 28, 2020		280,267		$	67.63		5.1	$	265,750
Options exercisable at March 28, 2020		96,386		$	65.15		2.4	$	265,750

There were options to purchase 419 shares of common stock exercised during the thirteen weeks ended March 28, 2020. There were options to purchase 33,228 ~~options~~shares of common stock exercised during the thirteen weeks ended March 30, 2019. ~~There were no options exercised in the thirteen weeks ended March 31, 2018.~~ As of March ~~30, 2019,~~28, 2020, there was ~~$1.9~~$4.0 million of unrecognized compensation cost related to ~~non-vested~~unvested stock options ~~which~~that is expected to be recognized over a weighted-average period of ~~3.0~~3.3 years.

C~~ash~~Cash generated from stock option exercises ~~was less~~was-less than $0.1 million in each of the thirteen weeks ended March 28, 2020 and March 30, 2019.

There was ~~no cash received from stock option exercises in the thirteen weeks ended March 31, 2018.~~

T~~here was no~~0 excess tax benefit generated from stock options exercised in the thirteen weeks ended March ~~30, 2019~~28, 2020 or March ~~31, 2018.~~30, 2019.

In May 2017, our ~~shareholders’~~shareholders approved the Dorman Products, Inc. Employee Stock Purchase Plan (the “ESPP”), which ~~makes~~made available up to 1,000,000 shares of our common stock for sale to eligible employees. The purpose of the ESPP, which is qualified under Section 423 of the Internal Revenue Service Code of 1986, as amended, is to encourage stock ownership through payroll deductions and limited cash contributions by our employees. These contributions are used to purchase shares of the Company’s common stock at a 15% discount from the lower of the market price at the beginning or end of the purchase window. There were no 0shares purchased under ~~this~~the ESPP plan in the thirteen weeks ended March 28, 2020 or March 30, 2019 ~~and March 31, 2018.~~as a result ofthe timing of the end of the purchase windows. During both the thirteen weeks ended March ~~30, 2019~~28, 2020 and March ~~31, 2018,~~30, 2019, compensation cost under the ~~Plan~~ESPP was ~~less than~~ $0.1 million.

Basic earnings per share is calculated by dividing our net income by the weighted average number of common shares outstanding during the period, excluding ~~nonvested~~unvested restricted stock ~~which is~~and shares of our common stock underlying RSUs and stock options that 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 equivalents are calculated using the treasury stock method and are computed based on outstanding stock-based awards. Stock-based awards of ~~114,000~~91,273 shares and ~~197,000~~114,000 shares were excluded from the calculation of diluted earnings per share as of March ~~30, 2019~~28, 2020 and March ~~31, 2018,~~30, 2019, respectively, as their effect would have been anti-dilutive.

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

	Thirteen Weeks Ended				Thirteen Weeks Ended
(in thousands, except per share data)	March 30, 2019		March 31, 2018		March 28, 2020		March 30, 2019
Numerator
Net income	$	23,407	$	30,647	$	22,775	$	23,407
Denominator:
Weighted average basic shares outstanding		32,801		32,917		32,354		32,801
Effect of stock-based compensation awards		88		86		72		88
Weighted average diluted shares outstanding		32,889		33,003		32,426		32,889
Earnings Per Share:
Basic	$	0.71	$	0.93	$	0.70	$	0.71
Diluted	$	0.71	$	0.93	$	0.70	$	0.71

We periodically repurchase, at the then current market price, and cancel shares of Dorman 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 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. For the thirteen weeks ended March ~~30, 2019,~~28, 2020, we repurchased and cancelled ~~14,090~~4,730 shares of common stock held in the 401(k) Plan for ~~$1.3~~$0.3 million at an average price of ~~$89.64~~$66.66 per share. During the fifty-two weeks ended December ~~29, 2018,~~28, 2019, we repurchased and cancelled ~~26,280~~22,380 shares of common stock held in the 401(k) Plan for ~~$2.0~~$1.9 million at an average price of ~~$74.79~~$87.26 per share.

Our Board of Directors authorized a share repurchase program of up to $400 million through December 31, 2020. Under this program, share repurchases may be made from time to time depending on market conditions, share price, share availability and other factors at our discretion. The share repurchase program does not obligate us to acquire any specific number of shares. For the thirteen weeks ended March ~~30, 2019,~~28, 2020, we repurchased and cancelled ~~101,000~~91,979 shares of common stock for ~~$8.4~~$5.5 million at an average price of ~~$82.89~~$59.41 per share under this program. For the fifty-two weeks ended December ~~29, 2018,~~28, 2019, we repurchased and cancelled ~~622,223~~499,564 shares of common stock for ~~$43.4~~$39.4 million at an average price of ~~$69.73~~$78.84 per share under this program.

We have a non-cancelable operating lease for our primary operating facility with a partnership in which Steven L. Berman, our Executive Chairman, and ~~his~~other members of the Berman family, ~~members,~~ are partners. Based upon the terms of the lease, payments will be $1.6 million in fiscal ~~2019~~2020 andwere $1.6 million in fiscal ~~2018.~~2019. This lease will expire on December 31, 2022. The right-of-use asset and total lease liabilities related to this lease were both ~~$5.6~~$4.4 million as of March ~~30, 2019.~~28, 2020. In the opinion of our Audit Committee, the terms and rates of this lease are no less favorable than those which could have been obtained from an unaffiliated party when the lease was renewed during November 2016.

We also have non-cancelable operating leases with a limited liability company in which certain of the former owners of PTI are members. The leases were entered into prior to the January 2, 2020 acquisition of PTI by the Company, and they are used in the PTI business. Based upon the terms of the leases, aggregate payments thereunder will be $0.3 million in fiscal 2020

Additionally, we ~~have~~had a non-cancelable operating lease for our Canadian operating facility from a corporation of which an employee, who is also the former owner of an acquired entity, and his family members are owners. Based upon the terms of the lease, payments ~~will be~~were $0.2 million in fiscal ~~2019 and were $0.5 million in fiscal 2018.~~2019. This lease expired on April 30, 2019.

We are a partner in a joint venture with one of our suppliers and own minority interests in ~~two~~2 other suppliers. Each of these investments is accounted for according to the equity method.

At March ~~30, 2019,~~28, 2020, we had ~~$2.4~~$2.3 million of net unrecognized tax benefits, ~~$2.1~~$2.0 million of which would ~~affect~~lower our effective tax rate if recognized. We recognize interest and penalties related to uncertain tax positions in income tax expense. As of March ~~30, 2019~~28, 2020 we had approximately ~~$0.6~~$0.4 million of accrued interest and penalties related to uncertain tax positions.

We file income tax returns in the United States, Canada, China, India, and Mexico. All years before ~~2015~~2016 are closed for United States federal tax purposes. Tax years before ~~2014~~2015 are closed for the states in which we file. Tax years before 2016 are closed for tax purposes in Canada. Tax years before 2015 are closed for tax purposes in ~~China and Canada.~~China. All tax years remain open for ~~Mexico.~~Mexico and India.

The carrying value of financial instruments such as cash, accounts receivable, accounts payable, and other current assets and liabilities approximate their fair value based on the short-term nature of these instruments.

~~On December 30, 2018, the beginning of our 2019 fiscal year, we adopted ASU No. 2016-02,~~ ~~Leases~~, which replaces existing lease guidance. The ASU is intended to provide enhanced transparency and comparability by requiring lessees to record right-of-use assets and corresponding lease liabilities on the balance sheet. The new guidance will continue to classify leases as either finance or operating, with classification affecting the pattern of expense recognition in the statement of operations. Additionally, ~~in August 2018, the FASB issued ASU 2018-11,~~ ~~Targeted Improvements to ASC 842, which includes an option to not restate comparative periods in transition and elect to use the effective date of ASC 842 as the date of initial application of transition.~~ We adopted the standard using the modified retrospective approach and adoption resulted in right-of-use assets of $36.3 million and lease liabilities of $37.9 million as of December 30, 2018. Deferred rent and lease incentive liabilities associated with historical operating leases totaling $1.6 million were reclassified to the operating lease right-of-use assets as required by ASC 842. The transition did not have a material impact on our results of operations or Statement of Cash Flows. See Note 5 for additional information on leases.

In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment, which eliminates the need to perform a hypothetical purchase price allocation to measure goodwill impairment. ASU 2017-04 is effective for annual periods beginning after December 15, 2019, including interim periods within those fiscal years. ~~Early adoption~~We adopted this ASU effective December 29, 2019, the beginning of our 2020 fiscal year. Adoption of this ASU did not have a material impact on our consolidated financial statements and related disclosures.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses, which was subsequently amended in November 2018 through ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments Credit Losses. ASU 2016-13 requires entities to estimate lifetime expected credit losses for trade and other receivables, net investments in leases, financial receivables, debt securities and other instruments, which will result in earlier recognition of credit losses. Further, the new credit loss model will affect how entities in all industries estimate their allowance for loss receivables that are current with respect to their payment terms. ASU 2016-13 is ~~permitted,~~effective for companies beginning with fiscal years beginning after December 15, 2019. We adopted this ASU effective December 29, 2019, the beginning of our 2020 fiscal year. Adoption of this ASU did not have a material impact on our consolidated financial statements and related disclosures.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic740): Simplifying the Accounting for Income Taxes. This ASU removes certain exceptions for recognizing deferred taxes for investments, performing intraperiod allocation and calculating income taxes in

interim periods. The ASU also adds guidance to reduce complexity in certain areas, including ~~adoption in an interim period. We are~~recognizing deferred taxes for tax goodwill and allocating taxes to members of a consolidated group. ASU 2019-12 is effective for companies beginning with fiscal years beginning after December 15, 2020. The Company is currently evaluating the new guidance ~~however,~~to determine the impact the adoption of this guidance will have on the Company’s results of operations, cash flows, and financial condition. However, at this time we do not believe this new guidance will have a material impact on our consolidated financial statements and related disclosures.

In January 2020, the FASB issued ASU 2020-01, Investments – Equity Securities (Topic 321), Investments – Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815): Clarifying the Interactions between Topic 321, Topic 323 and Topic 815, which clarifies the interactions between ASC 321, ASC 323 and ASC 815. The new guidance addresses accounting for the transition into and out of the equity method and also provides guidance on whether equity method accounting would be applied to certain purchased options and forward contracts upon settlement. ASU 2020-01 is effective for annual and interim periods in fiscal years beginning after December 15, 2020. The Company is currently evaluating the new guidance to determine the impact the adoption of this guidance will have on the Company’s results of operations, cash flows, and financial condition. However, at this time we do not believe this new guidance will have a material impact on our consolidated financial statements and related disclosures.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848):Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional guidance for a limited time to ease the potential accounting burden associated with transitioning away from reference rates such as LIBOR. The expedients and exceptions provided by ASU 2020-04 will not be available until after December 31, 2022, other than for certain hedging relationships entered into before December 31, 2022. ASU 2020-04 may be applied as of the beginning of the interim period that includes March 12, 2020 through December 31, 2022. The Company is currently evaluating the new guidance to determine the impact the adoption of this guidance will have on the Company’s results of operations, cash flows, and financial condition. However, at this time we do not believe this new guidance will have a material impact on our consolidated financial statements and related disclosures.

~~In June 2018, the FASB issued ASU 2018-07,~~ ~~Improvements to Nonemployee Share-Based Payment Accounting, which expands the scope~~

The recent outbreak of the ~~current employee share-based payment guidance~~novel coronavirus COVID-19, which was declared a pandemic by the World Health Organization on March 11, 2020, has led to ~~include share-based payments issued~~adverse impacts on the U.S. and global economies and created uncertainty regarding potential impacts to ~~nonemployees~~the Company’s employees, supply chain, operations, and customer demand. The COVID-19 pandemic has impacted and could further impact the Company’s operations and the operations of the Company’s customers, suppliers and vendors as a result of quarantines, facility closures, and travel and logistics restrictions. The extent to ~~substantially align~~which the ~~accounting for share-based payments for nonemployees~~COVID-19 pandemic impacts the Company’s business, results of operations and financial condition will depend on future developments, which are highly uncertain and cannot be predicted, including, but not limited to the duration, spread, severity, and impact of the COVID-19 pandemic, the effects of the COVID-19 pandemic on the Company’s customers, suppliers, and vendors and the remedial actions and stimulus measures adopted by local, state and federal governments, and to what extent normal economic and operating conditions can resume. Even after the COVID-19 pandemic has subsided, the Company may continue to experience adverse impacts to its business as a result of any economic recession or depression that has occurred or may occur in the future. Therefore, the Company cannot reasonably estimate the impact at this time.

In light of the COVID-19 pandemic, the Company has taken proactive steps to manage its costs and bolster its liquidity, including increasing the level of receivables collected under various factoring programs. Since the end of the first quarter of 2020 through April 24, 2020, the Company factored $192.0 million of receivables under these programs, with ~~those made to employees including, the fair value measurement, measurement date and classification of certain awards. The new guidance is effective for fiscal years beginning after December 15, 2018,~~$3.7 million in financing costs associated with early application permitted. We adopted this ASU effective December 30, 2018, the beginning of our fiscal 2019. Adoption of this ASU did not have a material impact on our consolidated financial statements.these accounts receivable sales.

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

“Management’s Discussion and Analysis of Financial Condition and Results of Operations” should be read in conjunction with the Consolidated Financial Statements and related notes thereto included in Part I, Item 1 of this Quarterly Report on Form 10-Q. As used herein, unless the context otherwise requires, “Dorman,” the “Company,” “we,” “us,” or “our” refers to Dorman Products, Inc. and its subsidiaries.

~~Certain~~This document contains certain statements ~~in this document~~that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements related to the ~~Company’s growth opportunities, future business prospects,~~COVID-19 pandemic, net sales, ~~margins, backlog, acquisitions, investments, cost offsets, quarterly fluctuations, customer concessions, fluctuations in foreign currency, mitigation of tariffs, working capital,~~diluted earnings per share, gross profit, gross margin, selling, general and administrative expenses, income tax expense, income before income taxes, net income, cash and cash equivalents, indebtedness, liquidity, the Company’s share repurchase program, the Company’s outlook and ~~income.~~distribution facility costs and productivity initiatives. Words such as ~~“may,”~~ “believe,” “demonstrate,” “expect,” “estimate,” “forecast,” ~~“project,” “plan,”~~ “anticipate,~~” “intend,~~” “should,” “will” and “likely” and similar expressions identify forward-looking statements. However, the absence of these words does not mean the statements are not forward-looking. In addition, statements that are not historical should also be considered forward-looking statements.

Readers are cautioned not to place undue reliance on those forward-looking statements, which speak only as of the date the statement was made. Such forward-looking statements are based on current expectations that involve a number of known and unknown risks, uncertainties and other factors (many of which are outside of our control) which may cause actual events to be materially different from those expressed or implied by such forward-looking statements. These risks, uncertainties and other factors include, but are not limited to: (i) competition in the automotive ~~aftermarket;~~aftermarket industry; (ii) unfavorable economic conditions; (iii) the loss or decrease in sales among one of our top customers; (iv) customer consolidation in the automotive aftermarket ~~leading to less favorable customer contract terms;~~industry; (v) foreign currency fluctuations and our dependence on foreign suppliers; (vi) extending credit to ~~customers who may be unable to pay;~~customers; (vii) the loss of a key supplier; (viii) limited customer shelf space; (ix) ~~delay in the development and design of~~reliance on new ~~products;~~product development; (x) changes in automotive technology and improvements in the quality of new vehicle parts; (xi) inability to protect our intellectual property and claims of intellectual property infringement; (xii) quality problems with products after their production and sale to customers; (xiii) loss of third party transportation providers on whom we ~~depend or increases in fuel prices;~~depend; (xiv) unfavorable results of legal proceedings; (xv) our executive chairman and his family owning a significant portion of the Company; (xvi) operations may be subject to quarterly fluctuations and disruptions from events beyond our control; (xvii) ~~risks associated with conflict minerals;~~cyber-attacks; (xviii) ~~risks associated with cyber-attacks; (xix)~~ imposition of taxes, duties or tariffs; (xix) the level of our indebtedness, (xx) exposure to risks related to accounts receivable; (xxi) the phaseout of LIBOR or the impact of the imposition of a new reference rate, (xxii) volatility in the market price of our common stock and potential securities class action litigation; ~~(xxii)~~(xxiii) losing the services of our executive officers or other highly qualified and experienced contributors; ~~and (xxiii)~~(xxiv) the inability to identify suitable acquisition candidates, complete acquisitions or integrate acquisitions ~~successfully.~~successfully; and (xxv) the effects of widespread public health epidemics, including COVID-19. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. ~~For additional information concerning factors that could cause actual results to differ materially from~~

See the ~~information contained in this report, reference is made to the information in~~“Statement Regarding Forward Looking Statements,” Part I, ~~“Item~~Item 1A, ~~Risk~~“Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December ~~29, 2018.~~28, 2019 and Part II, Item 1A, “Risk Factors” in this Quarterly Report on Form 10-Q for additional information regarding forward-looking statements and the factors that could cause actual results to differ materially from those anticipated in the forward-looking statements. The Company is under no obligation to (and expressly disclaims any such obligation to) update any of the information in this ~~report if~~document, including but not limited to any situation where any forward-looking statement later turns out to be inaccurate whether as a result of new information, future events or otherwise.

The following discussion and analysis, as well as other sections in this Quarterly Report on Form 10-Q, should be read in conjunction with the unaudited consolidated financial statements and footnotes thereto of Dorman Products, Inc. and its subsidiaries included in “Item 1. Financial Statements” of this Quarterly Report on Form 10-Q and with Management’s Discussion and Analysis of Financial Condition and Results of Operations and the audited consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December ~~29, 2018.~~28, 2019.

This Quarterly Report on Form 10-Q contains the registered and unregistered trademarks or service marks of Dorman and are the property of Dorman Products, Inc. and/or its affiliates. This Quarterly Report on Form 10-Q also may contain additional trade names, trademarks or service marks belonging to other companies. We do not intend our use or display of other parties’ trademarks, trade names or service marks to imply, and such use or display should not be construed to imply, a relationship with, or endorsement or sponsorship of us by these parties.

We ~~believe we~~ are aone of the leading ~~supplier~~suppliers of replacement parts and fasteners for passenger cars, light trucks, and heavy duty trucks in the automotive ~~aftermarket.~~aftermarket industry. As of December ~~29, 2018,~~28, 2019, we marketed approximately ~~77,000 unique parts~~78,000 distinct stock keeping units (“SKU’s”) as compared to ~~70,000~~approximately 77,000 as of December ~~30, 2017,~~29, 2018, many of which we designed and engineered. ~~Unique parts exclude~~This number excludes private label ~~stock keeping units (“SKU’s”)~~SKU’s and other variations in how we market, package and distribute our products, ~~but include unique parts~~includes distinct SKU’s of acquired ~~companies.~~companies, and reflects distinct SKU’s that have been discontinued at the end of their lifecycle. Our products are sold under our various brand names, under our customers’ private label brands or in bulk. We ~~believe we~~ are aone of the leading aftermarket ~~supplier~~suppliers of original equipment (“OE”) “dealer exclusive” parts. ~~Original equipment~~OE “dealer exclusive” parts are those parts which were traditionally available to consumers only from original equipment manufacturers or salvage yards. These parts include, among other ~~parts,~~parts: intake manifolds, exhaust manifolds, window regulators, radiator fan assemblies, tire pressure monitor sensors, complex electronics modules and exhaust gas recirculation (EGR) coolers.

We generate virtually all of our ~~revenues~~net sales from customers in the North American automotive aftermarket industry, primarily in the United States. Our products are sold primarily through automotive aftermarket ~~retailers;~~retailers, including through their online platforms; national, regional and local warehouse distributors and specialty ~~markets;~~markets, and salvage yards. We also distribute automotive ~~replacement~~aftermarket parts outside the United States, with sales primarily into Canada and Mexico, and to a lesser extent, Europe, the Middle East and Australia.

We may experience significant fluctuations from quarter to quarter in our results of operations due to the timing of orders placed by our customers. ~~Generally, the second and third quarters have the highest level of net sales.~~ The introduction of new products and product lines to customers, as well as business acquisitions, may also cause significant fluctuations from quarter to quarter.

~~We were engaged~~Early in ~~several site consolidation activities during~~2019, we began the ~~thirteen weeks ended March 30, 2019. Most significantly, we completed the consolidation~~process of transferring operations of our ~~Montreal~~existing distribution facility ~~(acquired as part of the MAS acquisition) into our~~in Portland, Tennessee to a new, larger facility nearby. Our new 800,000 square foot distribution center in Portland, ~~Tennessee. Additionally,~~Tennessee became fully operational in October 2019 and is in the process of being expanded to approximately 1 million square feet. During the thirteen weeks ended March 28, 2020, we ~~began transferring our existing distribution operations in Portland to this new facility and also completed the consolidation~~incurred $1.3 million of ~~an existing production facility in Michigan with our Flight facility in Pennsylvania. The total~~ costs ~~incurred~~ related to ~~these actions~~start up inefficiencies and duplication of facility overhead and operating costs primarily related to our Portland facility consolidation activities, of which $0.5 million was ~~$5.5~~included in selling, general and administrative expenses and $0.8 million ~~during~~was included in gross profit. These costs have decreased as compared to the ~~first quarter~~thirteen weeks ended December 28, 2019 due to planned productivity initiatives that reduced costs by $3.9 million, $0.6 million of ~~2019.We anticipate that we will incur higher~~which related to gross profit and $3.3 million related to selling, general and administrative expenses. We expect our distribution costs ~~throughout 2019~~to be back to more typical levels as we ~~complete~~move through 2020, subject to the ~~consolidation~~impact of ~~our Portland facilities.~~COVID-19.

We operate on a fifty-two or fifty-three week period ending on the last Saturday of the calendar year. Our ~~2019~~2020 fiscal year will be a fifty-two week period that will end on December ~~28, 2019.~~26, 2020. Our fiscal ~~2018~~2019 was a fifty-two week period that ended on December ~~29, 2018.~~28, 2019.

The COVID-19 pandemic has resulted and will continue to result in significant economic disruption, and it has and will adversely affect our business. Although certain states have issued executive orders requiring all workers to remain at home, unless their work is critical, essential or life-sustaining, throughout the U.S., automotive repair and the related supply and distribution of parts have generally been classified as critical, essential or life-sustaining businesses exempted from these government shutdowns. Therefore, the vast majority of our retail and wholesale customers currently are open for business. In turn, all of our U.S. facilities are also open and operating at this time, with modified staffing in certain locations where appropriate. We have taken actions to promote the welfare of our employees by enhancing safety protocols, including requiring administrative employees to work from home where applicable and implementing social distancing and robust sanitization practices at its facilities. We also have adopted a COVID-19 sick leave policy providing continued salary and benefits to eligible employees. Operationally, our global network of parts suppliers is meeting our current demand levels, including our suppliers in China that experienced a slowdown in the first part of the first quarter of fiscal 2020 due to the pandemic.

In late March, we began experiencing softening customer demand as a result of government-imposed restrictions designed to slow the spread of COVID-19 and expect those trends to continue through the second quarter and potentially longer. We expect demand to continue to be soft while government-imposed restrictions to curb the spread of COVID-19 remain in place. However, it is difficult to determine the full impact that the pandemic will have on the overall demand environment and our operations.

We have taken and expect to continue to take proactive steps to manage our costs and bolster our balance sheet and cash position in light of the pandemic, including but not limited to, the following:

As a result of these actions, we have increased our cash position and, as of April 24, 2020, we had approximately $300.0 million in cash and cash equivalents. We believe that our asset-light model and level of liquidity position us well to navigate the current economic disruption associated with the ongoing COVID-19 pandemic.

Of course, at the time of this filing and as we look ahead, we are unable to determine or predict the overall impact the COVID-19 pandemic will have on our customers, vendors and suppliers or our business, results of operations, liquidity or capital resources. Significant uncertainty still exists concerning the overall magnitude of the impact and the duration of the COVID-19 pandemic. As a result, we will continue to closely monitor updates regarding the spread of COVID-19 and adjust our operations according to guidelines from local, state and federal officials. In light of the foregoing, we may take further actions that alter our business operations or that we determine are in the best interests of our employees, customers, suppliers and shareholders.

New product development is ~~a critical~~an important success factor for us and istraditionally has been our primary vehicle for growth. We have made incremental investments to increase our new product development efforts each year since 2003 ~~in an effort~~ to grow our business and strengthen our relationships with our customers. The investments ~~are~~ primarily have been in the form of increased product development resources, increased customer and end-user awareness programs, and customer service improvements. These investments historically have enabled us to provide an expanding array of new product offerings and grow revenues at levels that ~~exceed~~generally have exceeded market growth rates. As a result of these investments, we introduced ~~1,229~~640 new ~~products~~distinct SKU’s to our customers and end users in the thirteen weeks ended March ~~30, 2019,~~28, 2020, including ~~512 “New to the Aftermarket”~~288 new-to-the-aftermarket SKU’s. We introduced ~~5,543 new products~~5,239 distinct SKU’s to our customers and end users in the fiscal year ended December ~~29, 2018,~~28, 2019, including ~~1,716 “New to the Aftermarket”~~1,625 new-to-the-aftermarket SKU’s.

One area of focus has been our complex electronics program, which capitalizes on the growing number of electronic components being utilized on today’s ~~original equipment~~OE platforms. ~~Current production models~~New vehicles contain an average of approximately thirty-five electronic modules, with some high-end luxury vehicles containing over one hundred modules. Our complex electronics products are designed and developed ~~in house~~in-house and ~~extensively~~ tested to help ensure consistent performance, and our product portfolio is focused on further developing our leadership position in the category.

~~In 2012, we introduced~~Another area of focus has been on Dorman HD ~~Solutions~~™Solutions™, a line of products ~~to be marketed~~we market for the medium and heavy duty truck ~~aftermarket.~~sector of the automotive aftermarket industry. We believe that this ~~market~~sector provides many of the same opportunities for growth that the passenger car and light truck sector of the automotive aftermarket industry has provided ~~us over the past several years. Our focus here is on~~us. Through Dorman HD Solutions™, we specialize in what formerly were “dealer ~~only”~~exclusive” parts similar to how we have approached the ~~automotive side of~~passenger car and light duty truck sector. During the ~~business. We launched the initial program with a limited offering, but have made additional investments in new product development efforts to expand our product offering. As of~~thirteen weeks ended March ~~30, 2019 have approximately 1,665~~28, 2020, we introduced 54 SKU’s in this product line. We ~~will~~expect to continue to invest aggressively in ~~our~~the medium and heavy duty product ~~line.~~category.

Our growth is also impacted by acquisitions. For example, ~~in August of 2018,~~on January 2, 2020, we acquired ~~Flight Systems Automotive Group LLC (“Flight Systems” or “Flight”). Additionally, in October 2017, we acquired MAS Automotive Distributors,~~Power Train Industries, Inc. (“~~MAS Industries” or “MAS”~~PTI”). ~~We believe Flight and MAS are highly complementary to our business and growth strategy.~~ We may acquire businesses in the future to supplement our financial growth, increase our customer base, add to our distribution capabilities or enhance our product development ~~resources.~~resources, among other reasons.

~~Vehicle~~The Company’s financial results are also impacted by various economic and industry factors, including, but not limited to the number, age and condition of vehicles in operation (“VIO”) at any one time, and miles driven by those VIO.

To begin, the Company’s products are primarily purchased and installed on a subsegment of the VIO, specifically weighted towards vehicles aged eight to thirteen years old. Each year, the United States seasonally adjusted annual rate (“US SAAR”) of new vehicles purchased adds a new year to the US VIO. According to data from the Auto Care Association (“Auto Care”), the US SAAR experienced a decline from 2008 to 2011 as consumers purchased fewer new vehicles as a result of the Great Recession of 2008. We believe that the declining US SAAR during that period resulted in a follow-on decline in our primary US VIO subsegment (eight to thirteen-year-old vehicles) commencing in 2016. However, following 2011 and the impact the Great Recession of 2008, US consumers began to increase their purchases of new vehicles which over time caused the US SAAR to recover and return to more historical levels. Consequently, we expect the US VIO for vehicles aged eight to thirteen years old to recover over the next several years.

In addition, we believe that vehicle owners ~~operate~~generally are operating their current vehicles longer than they did several years ~~ago. As a result, owners perform~~ago, performing necessary repairs and maintenance in order to keep those vehicles well maintained. According to data published by Polk, a division of IHS Automotive, the average age of ~~vehicles was~~VIO increased to 11.9 years as of October 2019 from 11.8 years as of October 2018 ~~which is an increase from 11.7 years as of October 2017~~ despite increasing new car sales. Additionally, the number of ~~vehicles in operation~~VIO in the United States continues to increase, growing ~~2.2%~~2% in ~~2018~~2019 to 290.0 million from 285.7 million ~~from 279.6 million~~ in ~~2017.~~2018. Approximately ~~48%~~57% of vehicles in operation are 11 years old or older. Vehicle scrappage rates have also decreased over the last several years.

The number of miles driven is another important statistic that impacts our business. According to the United States Department of Transportation, the number of miles driven has increased each year since 2011 with miles driven having increased ~~0.3%~~0.9% as of November ~~2018~~2019 as compared to November ~~2017.~~2018. Generally, as vehicles are driven more miles, the more likely it is that parts will fail.

The ~~combination~~recent executive orders issued by certain states in response to the COVID-19 pandemic requiring workers to remain at home, unless their work is critical, essential or life-sustaining, is having an adverse impact on work-related travel. In addition, quarantine orders throughout the U.S. are impacting personal travel. In fact, according to a report cited by the Auto Care Association, data indicates that, relative to a typical daily travel day in February 2020, personal travel during the work week dropped by 38% to 48% nationally by the end of March 2020, with the largest decline in travel occurring during the last week of the ~~factors above has accounted for a portion of our sales growth.~~quarter as more states entered into stay at home orders.

~~Competition among our customer base continues to increase.~~ As a result, while, prior to COVID-19, we might have expected to see additional sales growth due to the VIO and mileage trends referenced above, the impact of COVID-19 related travel restrictions is expected to adversely affect our sales growth potential and our future results, at least until such restrictions are lifted.

We operate in a highly competitive market. As a result, we are continuously evaluating our approach to brand protection. For example, in the third quarter of 2019, we modified our brand protection policy, which is designed to ensure that certain products bearing the Dorman name are not advertised below certain approved pricing levels.

We offer a variety of customer discounts, rebates, return allowances and other incentives. We may offer cash discounts for paying invoices in accordance with the specified discount terms of the invoice. In addition, we may offer pricing discounts based on volume purchased from us or other pricing discounts related to programs in accordance with a customer’s agreement. These discounts can be in the form of “off-invoice” discounts and are immediately deducted from sales at the time of sale. For those customers that choose to receive a payment on a quarterly or annual basis instead of “off-invoice,” we accrue for such payments as the related sales are made and reduce sales accordingly. Finally, rebates and discounts are provided to customers to support promotional activities such as advertising and sales force allowances, and allowances for warranty and overstock returns may also be provided.

Our customers, particularly our larger retail customers, regularly seek more favorable pricing and product return provisions, and extended payment terms when negotiating with us. We attempt to avoid or minimize these concessions as much as possible, but we have granted pricing concessions, indemnification rights, extended customer payment terms and allowed a higher level of product returns in certain cases. These

concessions impact net sales as well as our profit levels and may require additional capital to finance the business. We expect our customers to continue to exert pressure on our margins.

New customer acquisition costs refer to arrangements pursuant to which we incur change-over costs to induce a customer to switch from a competitor’s brand. In addition, change-over costs include the costs related to removing the new customer’s inventory and replacing it with our inventory, which is commonly referred to as a stock-lift. New customer acquisition costs are recorded as a reduction to revenue when incurred.

Many of our products carry a lifetime limited warranty, which generally covers defects in materials or workmanship and failure to meet specifications. In addition to warranty returns, we also may permit our customers to return new, undamaged products to us within customer-specific limits in the event that they have overstocked their inventories. At the time products are sold, we accrue a liability for product warranties and overstock returns as a percentage of sales based upon estimates established using historical information on the nature, frequency and average cost of the claim and the probability of the customer return. Significant judgments and estimates must be made and used in connection with establishing the sales returns and other allowances in any accounting period. Revision to these estimates is made when necessary, based upon changes in these factors. We regularly study trends of such claims.

In fiscal ~~2018,~~2019, approximately ~~77%~~79% of our products were purchased from suppliers in a variety of ~~foreign~~non-U.S. countries. The products generally are purchased through purchase orders with the purchase price specified in U.S. ~~Dollars.~~dollars. Accordingly, we generally do not have exposure to fluctuations in the relationship between the U.S. ~~Dollar~~dollar and various foreign currencies between the time of execution of the purchase order and payment for the product. To the extent that the U.S. ~~Dollar~~dollar changes in value relative to foreign currencies in the future, the price of the product for new purchase orders may change in equivalent U.S. ~~Dollars.~~dollars.

The largest portion of our overseas purchases comes from China. The Chinese Yuan to U.S. Dollar exchange rate has fluctuated over the past several years. Any future changes in the value of the Chinese Yuan relative to the U.S. Dollar may result in a change in the cost of products that we purchase from China. However, the cost of the products we procure is also affected by other factors including raw material availability, labor cost, and transportation ~~costs and other factors.~~costs.

Our acquisition of MAS increases our exposures to foreign currencies. MAS was headquartered in Montreal, Canada, and its financial transactions occur in both U.S. Dollars and Canadian Dollars. Since our consolidated financial statements are denominated in U.S. Dollars, the assets, liabilities, net sales, and expenses of MAS which are denominated in currencies other than the U.S. Dollar must be converted into U.S. Dollars using exchange rates for the current period. As a result, fluctuations in foreign currency exchange rates may impact our financial results. During the thirteen weeks ended March 30, 2019, we completed the consolidation of our Montreal facility into our new Portland, Tennessee facility.19

The overall impact of inflation has not resulted in a significant change in labor costs or the cost of general services utilized.

The cost of many commodities that are used in our products has fluctuated over time resulting in increases and decreases in the cost of our products. In addition, we have periodically experienced increased transportation costs as a result of higher fuel prices, capacity constraints and

other factors. We will attempt to offset cost increases by passing along selling price increases to customers, using alternative suppliers and sourcing purchases from other ~~countries.~~suppliers. However, there can be no assurance that we will be successful in these efforts.

Effective September 24, 2018, the Office of the United States Trade Representative (USTR) imposed an additional tariff on approximately $200 billion worth of Chinese imports. The tariff was approximately 10% as of December 29, ~~2018 and during~~2018. Effective for shipments departing China on or after May 10, 2019, the ~~thirteen weeks ended March 30, 2019.~~USTR increased this tariff to 25%. In addition, effective September 1, 2019, the USTR imposed a fourth tranche of tariffs on approximately $300 billion worth of Chinese imports with a tariff rate of 15%. The tariffs enacted to date will increase the cost of many products that are manufactured for us in China. We are taking several actions to mitigate the impact of the tariffs including, but not limited to, price increases to our customers and cost concessions from our suppliers. We expect to ~~mitigate~~continue mitigating the impact of tariffs in fiscal ~~2019~~2020 primarily through selling price increases to offset the higher tariffs incurred. Tariffs are not expected to have a material impact on our net income but ~~will~~are expected to increase net sales and lower our gross and operating profit ~~percentages as~~margins to the extent that these additional costs are passed through to customers.

In January 2020, the U.S. and Chinese governments signed a trade deal that reduced some U.S. tariffs on Chinese goods in exchange for Chinese pledges to, among other things, purchase more of American farm, energy and manufactured goods. In addition, the USTR has granted tariff relief for certain categories of products being imported from China. We expect that we will reverse tariff-related price increases previously passed along to our customers and cost concessions previously received from our suppliers as such tariffs are reduced or such other relief is granted.

The following table sets forth, for the periods indicated, the percentage of net sales represented by certain items in our Consolidated Statements of ~~Income:~~Operations:

	Thirteen Weeks Ended								Thirteen Weeks Ended*
(in millions)	March 30, 2019				March 31, 2018				March 28, 2020				March 30, 2019
Net sales	$	243.8	100.0	%	$	227.3	100.0	%	$	257.7	100.0	%	$	243.8	100.0	%
Cost of goods sold	$	156.3	64.1	%	$	138.6	61.0	%	$	172.9	67.1	%	$	156.3	64.1	%
Gross profit	$	87.5	35.9	%	$	88.6	39.0	%	$	84.8	32.9	%	$	87.5	35.9	%
Selling, general and administrative expenses	$	57.8	23.7	%	$	48.6	21.4	%	$	59.7	23.2	%	$	57.8	23.7	%
Income from operations	$	29.7	12.2	%	$	40.0	17.6	%	$	25.1	9.7	%	$	29.7	12.2	%
Interest income, net	$	0.0	0.0	%	$	0.2	0.1	%
Other income, net									$	2.6	1.0	%	$	0.0	0.0	%
Income before income taxes	$	29.8	12.2	%	$	40.1	17.7	%	$	27.7	10.7	%	$	29.8	12.2	%
Provision for income taxes	$	6.4	2.6	%	$	9.5	4.2	%	$	4.9	1.9	%	$	6.4	2.6	%
Net income	$	23.4	9.6	%	$	30.6	13.5	%	$	22.8	8.8	%	$	23.4	9.6	%

Thirteen Weeks Ended March ~~30, 2019~~28, 2020 Compared to Thirteen Weeks Ended March ~~31, 2018~~30, 2019

Net sales increased 7%6% to $257.7 million for the thirteen weeks ended March 28, 2020 from $243.8 million for the thirteen weeks ended March 30, ~~2019 from $227.3 million for the thirteen weeks ended March 31, 2018.~~2019. The increase in net sales iswas primarily ~~due~~driven by increased volumes. Customer demand began to ~~acquisitions~~decline late in March as the government imposed enhanced restrictions to prevent the further spread of COVID-19, with the corresponding negative impact on net sales estimated to be approximately 1.5% - 2.5%, or $4 million to $6 million, in the ~~last twelve months which contributed to approximately 2%~~first quarter of net sales growth, increased selling prices associated with tariffs, and the launch of a significant new chassis program to a major retail customer. Increasing sales order rates and site consolidation activities in the thirteen weeks ended March 30, 2019 resulted in backlog of approximately 3%2020.

Gross profit margin was 32.9% of net sales for the thirteen weeks ended March ~~30, 2019, which we believe will be realized in future quarters.~~

~~Gross profit margin was~~28, 2020 compared to 35.9% of net sales for the thirteen weeks ended March 30, ~~2019~~2019. The gross margin was lower primarily due to higher first quarter 2020 customer provisions compared to ~~39.0%~~first quarter 2019 (130 bps), and to a lesser extent, due to the pass-through of tariff costs to our customers (70 bps) and lower productivity levels as we continued to ramp up production at our new Portland, TN distribution facility (30 bps).

Selling, general and administrative expenses were $59.7 million, or 23.2% of net sales, for the thirteen weeks ended March 31, 2018. The gross profit percentage declined primarily as a result of the pass-through of tariff costs to our customers (approximately 130bps), acquisitions completed in the last 12 months which carry lower gross margins28, 2020 compared to our historical levels (approximately 100bps), and increased spending due to start-up inefficiencies and backlog growth related to our site consolidation activities (approximately 40bps). Compared to the thirteen weeks ended March 31, 2018, the gross margin was also impacted by the new chassis program launch to a major retail customer, which carried higher costs in the thirteen weeks ended March 30, 2019.

~~Selling, general and administrative expenses were~~ $57.8 million, or 23.7% of net sales, for the thirteen weeks ended March 30, ~~2019 compared to $48.6 million, 21.4%~~2019. The decrease in selling, general and administrative expense as a percentage of net sales during the thirteen weeks ended March 28, 2020 was primarily due to lower factoring costs (70 bps) due to decreased sales of accounts receivable, partially offset by lower productivity levels as we ramped up production at our new distribution center in Portland, TN (20 bps).

Other Income, net was $2.6 million for the thirteen weeks ended March ~~31, 2018. The increase~~28, 2020 which includes a gain of $2.5 million recognized as the difference between the carrying value of our previously held equity method investment in ~~selling, general~~PTI and ~~administrative expense during~~the implied fair value when we acquired the remaining equity interest in PTI in January 2020 that we did not already own.

Our effective tax rate was 17.8% for the thirteen weeks ended March ~~30, 2019 was primarily due~~28, 2020 compared to costs associated with our site consolidation activities, including severance, accelerated depreciation and other integration expenses of $2.3 million and startup inefficiencies and redundant facility capacity of $2.1 million, the inclusion of expenses of acquired operations, higher factoring costs due to increased sales of accounts receivable and higher interest rates, and wage and benefit inflation.

~~Our effective tax rate was~~ 21.4% for the thirteen weeks ended March 30, ~~2019 compared to 23.7% for the thirteen weeks ended March 31, 2018.~~2019. The ~~effective~~decrease in tax rate ~~decreased~~is primarily ~~due~~a result of discrete items in the quarter related to ~~lower~~a foreign tax credit carryback claim and ~~state taxes incurred during~~ the ~~thirteen weeks ended March 30, 2019.~~write-off of the deferred tax liability associated with PTI, which was previously an investment and is now a consolidated U.S. subsidiary.

Historically, our primary sources of liquidity have been our invested cash and the cash flow we generate from our operations, including accounts receivable sales programs provided by our customers. Cash and cash equivalents at March ~~30, 2019 decreased~~28, 2020 increased to ~~$40.8~~$161.8 million from ~~$43.5~~$68.4 million at December ~~29, 2018.~~28, 2019. Working capital was ~~$500.7~~$539.7 million at March ~~30, 2019~~28, 2020 compared to ~~$488.1~~$534.1 million at December ~~29, 2018.~~28, 2019. Shareholders’ equity was ~~$741.7~~$791.4 million at March ~~30, 2019 and $727.6~~28, 2020 compared to $773.6 million at December ~~29, 2018.~~28, 2019. Based on our current operating plan, we believe that our sources of available capital are adequate to meet our ongoing cash needs for at least the next twelve months. However, our liquidity could be negatively affected by extending payment terms to customers, a decrease in demand for our products, the outcome of contingencies or other ~~factors.~~factors, including the impact of the COVID-19 pandemic. See Note 8, “Commitments and Contingencies”, in the accompanying consolidated financial statements for additional information regarding commitments and contingencies that may affect our liquidity.

Tariffs also increase our uses of cash since we pay for the tariffs upon the arrival of our goods in the United States but collect the cash on any passthrough price increases from our customers on a delayed basis according to the payment terms negotiated with our customers.

Over the past several years we have continued to extend payment terms to certain customers as a result of customer requests and market demands. These extended terms have resulted in increased accounts receivable levels and significant uses of cash flows. We participate in accounts receivable sales programs with several customers ~~which~~that allow us to sell our accounts receivable to financial institutions to offset the negative cash flow impact of these payment terms extensions. ~~During~~However, any sales of accounts receivable through these programs ultimately result in us receiving a lesser amount of cash upfront than if we collected those accounts receivable ourselves in due course. Moreover, prior to the ~~thirteen weeks ended March 30, 2019 and March 31, 2018, we sold approximately $172.8 million and $151.0 million, respectively, under~~London Inter-Bank Offered Rate (“LIBOR”) being phased out in 2021, to the extent that any of these ~~programs. We had the ability~~accounts receivable sales programs bear interest rates tied to LIBOR, as LIBOR rates increase our cost to sell ~~significantly~~our receivables also increases. See Item 3. Quantitative and Qualitative Disclosures about Market Risk for more ~~accounts~~

~~receivable under these programs if the needs of the business warranted.~~information. Further extensions of customer payment terms will result in additional uses of cash flow or increased costs associated with the sales of accounts receivable.

During the thirteen weeks ended March 28, 2020 and March 30, 2019, we sold approximately $151.3 million and $172.8 million of accounts receivable, respectively, under these programs. We have the ability to sell significantly more accounts receivable under these programs if the needs of the business warrant, and, in fact, following the end of the first fiscal quarter of 2020, in light of COVID-19 we began increasing the amount of accounts receivable sold under these programs in an effort to enhance our liquidity. Since the end of the first quarter of 2020 through April 24, 2020, we factored $192.0 million, with $3.7 million in financing costs associated with these accounts receivable sales.

In December 2017, we entered into a credit agreement ~~which~~that will expire in December 2022. ~~This~~The credit agreement provides for an initial revolving credit facility of $100.0 million. The credit agreement replaced our previous $30.0 million ~~and gives us the ability to request increases of up to an incremental $100.0 million.~~facility. Borrowings under the ~~facility~~credit agreement are on an unsecured ~~basis with~~basis. At the Company’s election, the interest ~~rates ranging~~rate applicable to revolving credit loans under the credit agreement will be either (1) the Prime Rate as announced by Wells Fargo from time to time, (2) an Adjusted LIBOR Market Index Rate as measured by the LIBOR Market Index Rate plus the Applicable Margin which fluctuates between 65 basis points ~~to LIBOR plus~~and 125 basis points based ~~upon~~on the ratio of ~~consolidated funded debt~~the Company’s Consolidated Funded Debt to ~~consolidated~~Consolidated EBITDA, or (3) an Adjusted LIBOR Rate as ~~defined~~measured by the ~~credit agreement.~~LIBOR Rate plus the Applicable Margin which fluctuates between 65 basis points and 125 basis points based on the ratio of the Company’s Consolidated Funded Debt to Consolidated EBITDA. The interest rate at March ~~30, 2019~~28, 2020 was LIBOR plus 65 basis points ~~(3.15%~~(1.64%). During the occurrence and continuance of an event of default, all outstanding revolving credit loans will bear interest at a rate per annum equal to 2.00% in excess of the greater of (1) the Prime Rate or (2) the Adjusted LIBOR Market Index Rate then applicable. As of March 28, 2020, we were not in default in respect to the credit agreement. The credit agreement also contains ~~other~~ covenants, including those related to the ratio of certain consolidated fixed charges to consolidated EBITDA, capital expenditures, and share repurchases, each as defined by the credit agreement. The credit agreement also requires us to pay an unused fee of 0.10% on the average daily unused portion of the facility, provided the unused fee will not be charged on the first $30 million of the revolving credit facility. In late March, in an effort to enhance our liquidity in light of COVID-19, we drew down on the revolving credit facility in the amount of $99.0 million. As of March ~~30, 2019, there were no borrowings~~28, 2020, approximately $99.8 million was outstanding under ~~the~~that facility, ~~and we had two outstanding~~inclusive of issued but undrawn letters of credit ~~for approximately~~in the amount of $0.8 million ~~in the aggregate which~~that were issued to secure ordinary course of business transactions. Net of these letters of credit and our borrowings, we had approximately ~~$99.2~~$0.2 million available under the facility at March ~~30, 2019.~~28, 2020.

In addition to the foregoing, and, subject to certain requirements, the credit agreement gives us the ability to request increases in revolving credit commitments of up to an incremental $100.0 million. In light of COVID-19, we may, if market factors permit and business needs dictate, decide to request such an increase in commitments.

The following summarizes the activities included in the Consolidated Statements of Cash Flows:

	Thirteen Weeks Ended						Thirteen Weeks Ended
(in thousands)	March 30, 2019			March 31, 2018			March 28, 2020			March 30, 2019
Cash provided by operating activities	$	16,431		$	19,751		$	18,590		$	16,431
Cash used in investing activities		(8,838	)		(6,276	)		(17,967	)		(8,838	)
Cash used in financing activities		(10,257	)		(9,771	)		92,802			(10,257	)
Net (decrease) increase in cash and cash equivalents	$	(2,664	)	$	3,704
Net increase (decrease) in cash and cash equivalents							$	93,425		$	(2,664	)

During the thirteen weeks ended March 28, 2020, cash provided by operating activities was $18.6 million primarily as a result of $22.8 million in net income, non-cash adjustments to net income of $5.3 million and a net increase in operating assets and liabilities of $9.5 million. Compared to the Consolidated Balance Sheet at December 28, 2019, accounts receivable increased $29.5 million due to higher sales. Inventory decreased $28.0 million due to the impacts of COVID-19 slowing the receipts of inventory and increased sales. Prepaids and other current assets decreased $2.3 million primarily due to the timing of payments. Accrued compensation and other liabilities increased $6.8 million primarily due to the timing of payments associated with income taxes and employee compensation programs. Other assets increased $2.2 million primarily due to an increase in our long-term core inventory. Accounts payable decreased $19.3 million primarily due to the timing of vendor payments.

During the thirteen weeks ended March 30, 2019, cash provided by operating activities was $16.4 million primarily as a result of $23.4 million in net income, non-cash adjustments to net income of ~~$9.7~~$8.2 million and a net increase in operating assets and liabilities of ~~$16.7~~$15.2 million. Compared to the Consolidated Balance Sheet at December 29, 2018, accounts receivable decreased ~~$12.6~~$13.3 million due to higher sales of accounts receivable. Inventory increased $18.2 million due to inventory purchases to support new product launches and to maintain customer fill rates as we ~~consolidate~~consolidated facilities. Accounts payable decreased $11.1 million due to the timing of payments to our vendors. The change in prepaids, other assets, accrued customer rebates and ~~accrued compensation and other liabilities were not material.~~

During the thirteen weeks ended March 31, 2018, cash provided by operating activities was $19.8 million primarily as a result of $30.6 million in net income, non-cash adjustments to net income of $7.2 million and a net increase in operating assets and liabilities of $18.1 million. Compared to the Consolidated Balance Sheet at December 30, 2017, accounts receivable increased $8.9 million due to the timing of cash receipts. Inventory decreased $6.3 million due to decreased inventory purchases. Accounts payable decreased $16.5 million due to lower inventory purchases and the timing of payments to our vendors. The change in prepaids, other assets, andreturns, accrued compensation and other liabilities was not material.

Investing activities used ~~$8.8~~$18.0 million of cash in the thirteen weeks ended March ~~30, 2019~~28, 2020 and ~~$6.3~~$8.8 million ~~in the thirteen weeks ended March 31, 2018, as summarized below:~~

Financing activities ~~used $10.3~~provided $92.8 million of cash in the thirteen weeks ended March ~~30, 2019~~28, 2020 and ~~$9.8~~used $10.3 million in the thirteen weeks ended March ~~31, 2018~~30, 2019 as summarized below:

In light of COVID-19, during the ~~thirteen weeks ended March 30, 2019,~~first quarter of fiscal 2020 we ~~paid $8.4 million~~temporarily suspended repurchases under the previously disclosed share repurchase program approved by our board of directors. The Company may resume its repurchase program at any time when we believe it is prudent to ~~repurchase 101,000 common shares. In the thirteen weeks ended March 31, 2018, we paid $9.0 million to repurchase 128,870 common shares.~~

During the thirteen weeks ended March ~~30, 2019,~~28, 2020, we experienced no material changes to our contractual obligations as disclosed in our Annual Report on Form 10-K for the year ended December ~~29, 2018.~~28, 2019.

Please refer to Note ~~15,~~16, New and Recently Adopted Accounting Pronouncements, toin the Notes to Consolidated Financial Statements.

Item 3. Quantitative and ~~Qualitative~~Qualitative Disclosures About Market Risk

Our market risk is the potential loss arising from adverse changes in interest rates. ~~Substantially all of~~All our available credit and ~~our~~ accounts receivable ~~sale~~sales programs bear interest at rates tied to LIBOR. Under the terms of our ~~revolving~~ credit ~~facility~~agreement and customer-sponsored programs to sell accounts receivable, a change in either the ~~rates under our credit agreement~~lender’s base rate, LIBOR or discount rates under ~~our~~the accounts receivable sale programs would affect the rate at which we could ~~access~~borrow funds thereunder. A one percentage point increase in the discount rates under the accounts receivable sales programs would increase our interest expense on our variable rate debt, if any, and our financing costs associated with our sales of accounts receivable by approximately ~~$4.2~~$3.8 million annually. This estimate assumes that our variable rate debt balance and the level of sales of accounts receivable remains constant for an annual period and the interest rate change occurs at the beginning of the period. The hypothetical changes and assumptions may be different from what actually occurs in the future.

WeHistorically we have not ~~historically~~used, and currently do not intend to use, derivative financial instruments for trading or to speculate on changes in interest rates or commodity prices. We are not exposed to any significant market risks, foreign currency exchange ~~risk~~risks, or interest rate ~~risk~~risks from the use of derivative instruments. We did not hold any foreign exchange forward contracts at March 28, 2020.

We maintain disclosure controls and procedures designed to provide reasonable assurance that information required to be disclosed in reports filed or submitted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and accumulated and communicated to our management, including our

Chief Executive Officer and Chief Financial Officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosures.

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, conducted an evaluation, as of the end of the period covered by this report, of the effectiveness of our disclosure controls and procedures, as such term is defined in Exchange Act Rule 13a-15(e). Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures, as defined in Rule 13a-15(e), were effective at the reasonable assurance level.

~~Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, also conducted an evaluation of~~There was no change in our internal control over financial reporting ~~to determine whether any changes~~(as defined in Rule 13a-15(f) under the Exchange Act), that occurred during the quarter ended March ~~30, 2019~~28, 2020, that ~~have~~has materially affected, or ~~are~~is reasonably likely to materially affect, our internal control over financial reporting. ~~Based on that evaluation, there was no such change during the quarter ended March 30, 2019.~~

Control systems, no matter how well conceived and operated, are designed to provide a reasonable, but not an absolute, level of assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected. The Company conducts periodic evaluations of its internal controls to enhance, where necessary, its procedures and controls.

~~We are a party~~The information set forth under Note 8, “Commitments and Contingencies,” to ~~or otherwise involved~~the Notes to Consolidated Financial Statements contained in ~~legal proceedings that arise in the ordinary course~~Part I, Item 1 of business, such as various claims and legal actions involving contracts, 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,this report is ~~immaterial.~~incorporated herein by reference.

~~There have been no material changes in our~~The following updates the risk factors ~~from the risks~~ previously reported in Part 1, “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December ~~29, 2018.~~ 28, 2019:

Our business, results of operations and financial condition could be materially adversely affected by the effects of widespread public health epidemics, including the novel coronavirus (“COVID-19”), that are beyond our control.

Any outbreaks of contagious diseases, public health epidemics and other adverse public health developments in countries where we, our customers and suppliers operate could have a material and adverse effect on our business, results of operations and financial condition. The recent COVID-19 outbreak, initially limited to a region in China and now affecting the global community, including the United States, has, and is expected to continue to, adversely impact our business, and the nature and extent of the impact may be highly uncertain and beyond our control. Uncertain factors relating to COVID-19 include the duration, spread and severity of the virus, the effects of the COVID-19 pandemic on the Company’s customers, vendors and suppliers, and the actions, or perception of actions that may be taken, to contain or treat its impact, including declarations of states of emergency, business closures, manufacturing restrictions and a prolonged period of travel, commercial and/or other similar restrictions and limitations.

As a result of COVID-19 and the measures designed to contain its spread, our sales have been, and could continue to be negatively impacted as a result of disruption in demand, which could have a material and adverse effect on our business, results of operations and financial condition. Similarly, our suppliers may not have the materials, capacity, or capability to manufacture our products according to our schedule and specifications. If our suppliers’ operations are impacted, we may need to seek alternate suppliers, which may be more expensive, may not be available or may result in delays in shipments to us and subsequently to our customers, each of which would affect our results of operations. The duration of the disruption to our customers and to our supply chain, and related financial impact to us, cannot be estimated at this time. Should such disruption continue for an extended period of time, the impact could have a material adverse effect on our business, results of operations and financial condition.

You should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December ~~29, 2018,~~28, 2019 and the above risk factor, each of which could materially affect our business, financial condition or future results. ~~The~~Such risks ~~described in our Annual Report on Form 10-K~~ are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

During the thirteen weeks ended March ~~30, 2019,~~28, 2020, we purchased shares of our common stock as follows:

Period

Total Number
of Shares
Purchased
(1) (2)

Average
Price Paid
per Share

Total Number
of Shares
Purchased as
Part of Publicly
Announced
Plans or
Programs (2)

Maximum
Number
(or Approximate
Dollar Value)
of Shares that
May Yet Be Purchased
Under the Plans or Programs (2)

December 30, 2018 through January 26, 2019

13,434

$
91.92

-

$
183,316,391

January 27, 2019 through February 23, 2019

3,709

$
82.59

-

$
183,316,391

February 24, 2019 through March 30, 2019

105,612

$
82.83

101,000

$
174,944,098

Total

122,755

$
83.82

101,000

$
174,944,098

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (4)		Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs (4)
December 29, 2019 through January 25, 2020 (1)		3,396	$	76.84		-	$	143,929,799
January 26, 2020 through February 22, 2020 (2)		1,336	$	67.59		-	$	143,929,799
February 23, 2020 through March 28, 2020 (3)		96,827	$	59.49		91,979	$	138,465,024
Total		101,559				91,979

The Exhibits included in this report are listed in the Exhibit Index on page ~~21,~~25, which is incorporated herein by ~~reference~~reference.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

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

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

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common stock, par value $0.01 per share		DORM		NASDAQ Global Select Market

				Page
Part I — FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited)

	~~Consolidated Statements of Income:~~

	~~Thirteen Weeks Ended March 30, 2019 and March 31, 2018~~Consolidated Statements of Operations:			3

	~~Consolidated Balance Sheets~~Thirteen Weeks Ended March 28, 2020 and March 30, 2019			43

	~~Consolidated Statements of Shareholders’ Equity~~		5

		Consolidated ~~Statements of Cash Flows~~Balance Sheets			64

		~~Notes to~~ Consolidated ~~Financial~~ Statements of Shareholders’ Equity			75

~~Item 2.~~		~~Management’s Discussion and Analysis~~Consolidated Statements of ~~Financial Condition and Results of Operations~~Cash Flows			156

~~Item 3.~~		~~Quantitative and Qualitative Disclosures About Market Risk~~Notes to Consolidated Financial Statements			197

Item 4.2.		~~Controls~~Management’s Discussion and ~~Procedures~~Analysis of Financial Condition and Results of Operations			1916

Item 3.		Quantitative and Qualitative Disclosures About Market Risk			22

Item 4.		Controls and Procedures			22

Part II — OTHER INFORMATION

Item 1.		Legal Proceedings			2024

Item 1A.		Risk Factors			2024

Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds			2024

Item 3.		Defaults Upon Senior Securities			2025

Item 4.		Mine Safety Disclosures			2025

Item 5.		Other Information			2025

Item 6.		Exhibits			2025

Exhibit Index		21			26

Signatures		22			27

(in thousands)	As of December 30, 2017		Effect of Adoption		As of December 31, 2017

Accounts receivable, net	$	241,880	$	95,537	$	337,417
Accrued customer rebates and returns	$	6,522	$	95,537	$	102,059


~~10.1~~		~~Employment Agreement, dated January 10, 2019, between the Company and Kevin M. Olsen. Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on January 11, 2019.~~

~~10.2~~3.2		~~Offer Letter, dated January 24, 2019, between the Company~~Dorman Products, Inc. Amended and ~~David M. Hession.~~Restated By-Laws, as amended April 7, 2020. Incorporated by reference to Exhibit ~~10.1~~3.2 to the Company’s Current Report on Form 8-K filed on ~~February 19, 2019.~~April 9, 2020.

~~10.3~~10.1		Form of ~~2019 Chief Executive Officer Restricted~~Dorman Products, Inc. Non-Qualified Stock Option Award ~~under~~Pursuant to the Dorman Products, Inc. 2018 Stock Option and Stock Incentive Plan. Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on ~~February 25, 2019.~~March 2, 2020.
10.2		Form of Dorman Products, Inc. Restricted Stock Unit Award Pursuant to the Dorman Products, Inc. 2018 Stock Option and Stock Incentive Plan. Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on March 2, 2020.
10.3		Form of Dorman Products, Inc. Performance Restricted Stock Unit Award Pursuant to the Dorman Products, Inc. 2018 Stock Option and Stock Incentive Plan. Incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on March 2, 2020.
31.1		Certification of Chief Executive Officer pursuant to Rule 13a-14(a), as ~~required by~~adopted pursuant to Section 302 of the Sarbanes-Oxley Act of ~~2002 (filed with this report).~~2002. *

31.2		Certification of Chief Financial Officer pursuant to Rule 13a-14(a), as ~~required by~~adopted pursuant to Section 302 of the Sarbanes-Oxley Act of ~~2002 (filed with this report).~~2002. *

32		Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished with this report). **

101		The following financial statements from the Dorman Products, Inc. Quarterly Report on Form 10-Q as of and for the quarter ended March ~~30, 2019,~~28, 2020, formatted in Inline XBRL (eXtensible Business Reporting Language): (i) the Consolidated Statements of ~~Income;~~Operations; (ii) the Consolidated Balance Sheets; (iii) Consolidated Statements of Shareholders’ Equity; (iv) the Consolidated Statements of Cash Flows and ~~(iv)~~(v) the Notes to Consolidated Financial Statements.

104		The cover page from the Company’s Quarterly Report on Form 10-Q as of and for the quarter ended March 28, 2020, formatted in Inline XBRL (included as Exhibit 101).

	Thirteen Weeks Ended March 29, 2018
	Common Stock						Additional
(in thousands, except share data)	Shares Issued			Par Value			Paid-In Capital			Retained Earnings			Total
Balance at December 30, 2017		33,571,524		$	336		$	44,812		$	589,659		$	634,807
Compensation expense under Incentive Stock Plan		—			—			898			—			898
Purchase and cancellation of common stock		(131,750	)		(2	)		(237	)		(8,969	)		(9,208	)
Issuance of non-vested stock, net of cancellations		66,441			1			607			—			608
Other stock related activity, net of tax		(2,716	)		—			(614	)		—			(614	)
Net income		—			—			—			30,647			30,647
Balance at March 31, 2018		33,503,499		$	335		$	45,466		$	611,337		$	657,138

	Thirteen Weeks Ended March 30, 2019
(in thousands)	As Previously Reported		Adjustment			As Revised
Revised Consolidated Statement of Cash Flows from Operating Activities Amounts:
Accounts receivable	$	12,611	$	722		$	13,333
Accrued customer rebates and returns	$	—	$	(497	)	$	(497	)
Accrued compensation and other liabilities	$	3,268	$	(225	)	$	3,043
Net cash provided by operating activities	$	16,431	$	—		$	16,431

(in thousands)	March 30, 2019
2019 (Remainder of 2019)	$	4,423
2020		5,700
2021		5,290
2022		4,915
2023		3,401
2024 and thereafter		24,980
Total lease payments		48,709
Less: Imputed interest		(11,592	)
Present value of lease liabilities	$	37,117

Period	Total Number of Shares Purchased (1) (2)		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)		Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs (2)
December 30, 2018 through January 26, 2019		13,434	$	91.92		-	$	183,316,391
January 27, 2019 through February 23, 2019		3,709	$	82.59		-	$	183,316,391
February 24, 2019 through March 30, 2019		105,612	$	82.83		101,000	$	174,944,098
Total		122,755	$	83.82		101,000	$	174,944,098

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company