−Removed: We are one of the leading suppliers of replacement parts and fasteners for passenger cars, light trucks, and heavy-duty trucks in the automotive aftermarket industry.
+Added: We are one of the leading suppliers of replacement parts and fasteners for passenger cars and light-, medium-, and heavy-duty trucks in the automotive aftermarket industry.
As of December 25, 2021, we marketed approximately 118,000 distinct parts compared to approximately 81,000 as of December 26, 2020, many of which we designed and engineered.
This number excludes private label stock keeping units and other variations in how we market, package and distribute our products, includes distinct parts of acquired companies and reflects distinct parts that have been discontinued at the end of their lifecycle.
+Added: The increase in the number of distinct parts in 2021 was largely driven by our acquisition of Dayton Parts.
We are one of the leading aftermarket suppliers of original equipment (“OE”) “dealer exclusive” parts.
−Removed: Original equipment “dealer exclusive” parts are those which were traditionally available to consumers only from original equipment manufacturers or used parts from salvage yards and include, among other parts, intake manifolds, exhaust manifolds, window regulators, radiator fan assemblies, tire pressure monitor sensors, exhaust gas recirculation (EGR) coolers and complex electronics modules.
+Added: Original equipment “dealer exclusive” parts are those which were traditionally available to professional installers and consumers only from original equipment manufacturers or used parts from salvage yards and include, among other parts, leaf springs, intake manifolds, exhaust manifolds, window regulators, radiator fan assemblies, tire pressure monitor sensors, exhaust gas recirculation (EGR) coolers and complex electronics modules.
Fasteners include such items as oil drain plugs, wheel bolts, and wheel lug nuts.
For fiscal 2021, approximately 73% of our products were sold under brands that we own, and the remainder of our products were sold for resale under customers' private labels, other brands or in bulk.
−Removed: Our products are sold primarily in the United States through automotive aftermarket retailers (such as Advance Auto Parts, Inc.
−Removed: (“Advance”), AutoZone, Inc.
−Removed: (“AutoZone”), and O'Reilly Automotive, Inc.
−Removed: (“O’Reilly”)), including through their online platforms;
−Removed: national, regional and local warehouse distributors (such as Genuine Parts Co.
−Removed: – NAPA (“NAPA”));
+Added: Our products are sold primarily in the United States through automotive aftermarket retailers, including through their online platforms;
+Added: national, regional and local warehouse distributors;
and specialty markets, and salvage yards.
2 unchanged sentences
The automotive aftermarket industry has two distinct sectors:
−Removed: parts for passenger cars and light trucks, which accounted for projected industry sales of approximately $281.3 billion in 2020 1 , and parts for medium and heavy-duty trucks, which accounted for projected industry sales of approximately $98.8 billion in 2020 1 .
−Removed: We sell products primarily for passenger cars and light trucks, including those with diesel engines, and for medium and heavy-duty trucks.
+Added: parts for passenger cars and light trucks, which according to the 2022 Auto Care Association Factbook, accounted for projected industry sales of approximately $324.8 billion in 2021, and parts for medium and heavy-duty trucks, which accounted for projected industry sales of approximately $94.4 billion in 2021.
+Added: We sell products into both sectors, with a majority of our products being designed for the passenger car and light truck sector.
+Added: Our acquisition of Dayton Parts in 2021 increased our product offerings in the medium and heavy-duty truck sector.
Two distinct groups of end-users buy replacement vehicle parts for passenger cars and light trucks:
4 unchanged sentences
Automobile dealership service departments generally obtain parts through the distribution systems of vehicle manufacturers and specialized national and regional parts distributors.
+Added: The largest purchasers of medium- and heavy-duty vehicle aftermarket parts are OE manufacturers, independent distributors, including organizations associated with large buying groups and other distributors, as well as independent component specialists and rebuilders, and auto parts stores.
+Added: The service work performed on medium- and heavy-duty vehicles is generally completed by end user businesses that utilize these vehicles in their operations, fleets, and independent garages and distributors, who buy parts from the purchasers above or in some instances directly from suppliers like us.
Spending in the aftermarket for parts for passenger cars and light trucks, as well as medium and heavy-duty trucks, generally can be grouped into three categories:
1 unchanged sentence
Discretionary, such as accessories and performance, tends to move in-line with consumer discretionary spending.
−Removed: Maintenance is composed of products and services, such as oil and oil changes, and tends to be less correlated with discretionary spending.
−Removed: Repair consists mainly of replacement parts that fail over time and tends to be less cyclical as it is largely comprised of parts necessary for a vehicle to function properly or safely.
+Added: Maintenance is composed of products and services, such as oil and oil changes, and tends to be
+Added: less correlate d with discretionary spending.
+Added: R epair consists mainly of replacement p arts that fail over time and tends to be less cyclical as it is largely comprised of parts necessary for a vehicle t o function prop erly or safely.
The majority of our products fall into the repair category.
3 unchanged sentences
See ITEM 1A, “Risk Factors – Risks Related to Our Business – Our Industry, Operations and Competition” for information regarding the potential impacts of consolidation on our business.
−Removed: 2021 Auto Care Association Factbook
Retailers and others who purchase automotive aftermarket parts for resale are constrained to a finite amount of space in which to display and stock products.
−Removed: Thus, the reputation for quality, customer serv ice, and line profitability that a supplier provides are significant factors in a retailer’s or other reseller’s decision as to which product lines to carry in the limited space available.
−Removed: Further, because of the efficiencies achieved through the ability to order all or part of a complete line of products from one supplier (with possible volume discounts), as opposed to satisfying the same requirements through a variety of different sources, retailers and other resellers of automotive aftermarket parts seek to purchase products from fewer but stronger suppliers.
+Added: Thus, the reputation for quality, customer service, and line profitability that a supplier provides are significant factors in a retailer’s or other reseller’s decision as to which product lines to carry in the limited space available.
+Added: Further, because of the efficiencies achieved through the ability to order all or part of a complete line of products from one supplier (with possible volume discounts), as opposed to satisfying the same requirements through a variety of different sources, retailers and other resellers of automotive aftermarket parts often seek to purchase products from fewer but stronger suppliers.
Brands and Products
−Removed: We market our products under the DORMAN ® brand name and several sub-brands, which identify products that address specific segments of the automotive aftermarket industry.
+Added: We market our products under the DORMAN ® and Dayton Parts ® brand names and several sub-brands, which identify products that address specific segments of the automotive aftermarket industry.
In addition, across all our sub-brands, customers can find a subset of products that have been branded DORMAN ® OE FIX™ products.
7 unchanged sentences
DORMAN ® Conduct-Tite ® - A wide array of electrical components for common repairs as well as for enthusiasts to customize and upgrade their vehicles.
+Added: Dayton Parts® - Complete product offering of brake, spring, steering, suspension, driveline and hitch & coupling product lines.
We group our products into four major classes:
7 unchanged sentences
Our powertrain product line includes intake and exhaust manifolds, cooling products, harmonic balancers, fluid lines, fluid reservoirs, connectors, 4-wheel drive components and axles, drain plugs, and other engine, transmission and axle components.
−Removed: Chassis products include control arms, ball joints, tie-rod ends, brake hardware and hydraulics, wheel and axle hardware, suspension arms, knuckles, links, bushings, and other suspension, steering, and brake components.
−Removed: Our line of automotive body products includes door handles and hinges, window lift motors,
−Removed: window regulators, switches and handles, wiper components, lighting, electrical, and other interior and exterior automotive body components.
−Removed: Hardware products include threaded bolts, auto body and home fasteners, automotive and home electrical wiring components, and other hardwa re assortments and merchandise.
+Added: Chassis products include control arms, ball joints, tie-rod ends, brake hardware and hydraulics, wheel and axle hardware, suspension arms, knuckles, links, bushings, leaf springs, and other suspension, steering, and brake components.
+Added: Our line of automotive body products includes door handles and hinges, window lift motors, window regulators, switches and handles, wiper components, lighting, electrical, and other interior and exterior automotive body components.
+Added: Hardware products include threaded bolts and auto body fasteners, automotive and home electrical wiring components, and other hardware assortments and merchandise.
We warrant our products against certain defects in material and workmanship when used as designed on the vehicle on which it was originally installed.
3 unchanged sentences
Product development and continuous innovation are central to our business.
−Removed: The development of a broad range of products, many of which are not conveniently or economically available elsewhere, has enabled us to grow to our present size and is an important driver for our future growth.
+Added: The development of a broad range of products, many of which are not conveniently or economically available elsewhere, historically has enabled us to grow and is an important driver for our future growth.
Our product strategy has been to design and engineer products, many of which we believe are better and easier to install and/or use than the original parts they replace, and to commercialize automotive parts for the broadest possible range of uses.
−Removed: New product ideas are reviewed by our product management staff and a cross-functional in-house team.
+Added: All new product ideas are reviewed by our product management staff and a cross-functional in-house team to determine potential improvements and inclusions that will create a better user experience.
The following table represents the number of distinct parts we introduced for each of the last three fiscal years:
6 unchanged sentences
In 2021, we introduced several new product categories to the aftermarket including:
−Removed: a new build electronic power steering rack, complete wiper motor and linkage arm assemblies, pre-pressed axles, loaded brake backing plates and flexible fuel lines.
+Added: a new upgraded Dorman® OE FIX™ aluminum oil filter housing solution, aftermarket-exclusive hub rotor and caliper bracket bolt kits, and new complex electronic solutions, such as cruise control distance sensors, blind spot
+Added: detection modules and other advanced driver assistance system (ADAS) products.
Each of these solutions gives installers and consumers additional choice when searching for reliable, affordable replacements.
−Removed: Other innovative technologies we released in 2020 include climate control modules, new fuel pump driver modules and loaded knuckles, many of which are DORMAN ® OE FIX TM products providing additional durability against wear and elements to reduce potential failure points to help avoid the need for future repairs.
+Added: Other innovative technologies we released in 2021 include diesel exhaust fluid (DEF) emission components, including heaters and pumps, and new electronic power steering rack solutions.
+Added: We also continued our efforts to find ways to further simplify customer installation efforts through new combination solutions, such as pre-pressed axle and bearing assemblies.
Our product teams also grow and expand existing categories by introducing new products that are designed to fit more vehicles, providing enhanced opportunities for aftermarket service providers to serve their customers.
−Removed: In 2020, we extended our lines in strategic categories such as valve covers, oil control valves, and drive shafts.
+Added: In 2021, we extended our lines in strategic core categories such as window regulators, chassis and control arms, valve covers, manifolds, and drive shafts.
Some of our most popular innovations are those that provide vehicle owners significant savings over other repair alternatives, such as rust repair solutions.
Our truck bed floor supports, differential covers and fuel tank crossmembers often eliminate the need to replace entire truck beds, axles and other large vehicle sections by facilitating direct repair of corroded components.
−Removed: We also grew our lines of diesel and heavy-duty solutions in fiscal 2020, introducing hundreds of new products in categories such as nitrogen oxide sensors, LED forward lighting and diesel aftertreatment including:
−Removed: diesel exhaust fluid heaters and pumps and a selective catalytic reduction dosing module.
−Removed: We reduced new product activity in the first half of 2020 due to uncertainties related to COVID-19.
−Removed: We increased new product development and commercialization in the second half of 2020 as overall market demand rebounded.
−Removed: As a result, we ended the year with lower new product introductions than the prior year.
−Removed: Development activities have returned to prior levels and we expect to return to our historical levels of performance in 2021.
+Added: We also grew our lines of heavy-duty solutions in fiscal 2021 through the acquisition of Dayton Parts, which lines include leaf springs, brake drums, and various other steering and suspension products.
+Added: In addition to these new solutions from Dayton Parts, we also introduced hundreds of new products into our Dorman® HD Solutions™ line, including a new Diesel Decoder™ tool that enables scanning of engine diagnostics, new exhaust gas recirculation (EGR) valves, and various new engine and emission sensors.
Sales and Marketing
4 unchanged sentences
(ii) approximately 33% of our net sales was generated from sales to warehouse distributors, such as NAPA, which may be local, regional or national in scope, and which also may engage in retail sales;
−Removed: (iii) approximately 11% of our net sales was generated from our heavy-duty channel and sales to special markets, which include, among others, mass merchants, such as Walmart, salvage yards and the parts distribution systems of OE parts manufacturers.
+Added: (iii) approximately 11% of our net sales was generated from our heavy-duty channel including through national, regional, and local warehouse distributors, such as FleetPride, and specialty service shops, and sales to other markets, which include, among others, salvage yards and the parts distribution systems of OE parts manufacturers as well as mass merchants, such as Walmart, for our home electrical wiring components.
As of December 25, 2021, we had a sales and sales support team of over 120 people selling our products either directly to our customers or, with respect to certain select customers, indirectly through independent manufacturers’ representative agencies worldwide.
1 unchanged sentence
Our sales strategy includes increasing sales not only by securing new customers, but also by adding new product lines and expanding product selection within existing customers in an effort to make our customers a destination for new-to-the-aftermarket products.
−Removed: We use online catalogs, application guides, digital marketing tools, training materials, videos and additional content to describe and sell our products and other applications as well as to train our customers' sales teams.
+Added: We use catalogs, application guides, digital marketing tools, training materials, videos and additional content to describe and sell our products and other applications as well as to train our customers' sales teams.
Our primary website, www.dormanproducts.com, provides a search engine that can be used to search our extensive catalog.
The information on the website is not and should not be considered part of this Form 10-K and is not incorporated by reference in this Form 10-K.
−Removed: As of December 26, 2020, we serviced more than 3,600 active accounts.
−Removed: During fiscal 2020, three customers (Advance, AutoZone and O’Reilly) each accounted for more than 10% of net sales and in the aggregate accounted for approximately 56% of net sales.
+Added: As of December 25, 2021 , w e s ervice d more than 4,5 00 acti ve accounts.
+Added: During fiscal 2021 , three customers each accounted for more than 10% of net sales and in the aggregate accounted for approximat ely 54% of net sales.
Manufacturing and Procurement
−Removed: Substantially all of our products are manufactured by third parties.
+Added: Most of our products are manufactured by third parties.
We engage third-party manufacturers around the world to develop and manufacture products according to our performance and design requirements, oftentimes using tooling that we own.
1 unchanged sentence
Our global supplier network provides access to a broad array of manufacturing capabilities and technologies while limiting our dependency on any single source of supply.
−Removed: While our supplier selection and sourcing programs will continue to leverage our strategic manufacturing firms for a substantial portion of our product portfolio, we also have qualified alternative sources available to provide additional support and capacity, if needed.
+Added: While our supplier selection and sourcing programs will continue to leverage our strategic manufacturers for a substantial portion of our product portfolio, we also have qualified alternative sources available to provide additional support and capacity, if needed.
We make a concerted effort to build and nurture strong, healthy relationships with our suppliers.
1 unchanged sentence
Packaging, Inventory and Shipping
−Removed: Finished products are received at one or more of our facilities, depending on the type of part.
+Added: Finished products acquired from third-party suppliers are received at one or more of our facilities, depending on the type of part.
It is our practice to inspect samples of shipments based upon supplier performance.
4 unchanged sentences
Computerized tracking systems, mechanical counting devices and experienced workers combine to help ensure that the proper variety and numbers of parts meet the correct packaging materials at the appropriate places and times to produce the required quantities of finished products.
−Removed: Packaged inventory is stocked in the warehouse portions of our facilities and is organized to facilitate the most efficient methods of retrieving product to fill customer orders.
+Added: Packaged inventory is either stocked in the warehouse portions of our facilities or in distribution centers maintained by our third-party logistics providers and is organized to facilitate the most efficient methods of retrieving product to fill customer orders.
We strive to maintain a level of inventory to adequately meet current customer order demand with additional inventory to satisfy new customer orders and special programs.
−Removed: We ship our products from each of our locations by contract carrier, common carrier or parcel service.
−Removed: Products are generally shipped to each customer's main warehouses for redistribution within their network.
−Removed: certain circumstances, at the request of the customer, we ship directly to the customer's warehouses, stores or other locations either via smaller direct ship orders or consolidated store orders that are cross docked.
+Added: We ship our products by contract carrier, common carrier or parcel service.
+Added: Products are generally shipped to each customer's main warehouses for redistribution within its network.
+Added: In certain circumstances, at the request of a customer, we ship directly to that customer's warehouses, stores or other locations either via smaller direct ship orders or consolidated store orders that are cross docked.
Remanufacturing and Recycling Parts
2 unchanged sentences
A used core is remanufactured and sold to the customer as a replacement for a unit on a vehicle.
−Removed: Customers and end-users that purchase remanufactured products will generally return the used core to us, which we then use in the remanufacturing process to make another finished good.
+Added: Customers and end-users that purchase a remanufactured replacement part will generally return the used core to us, which we then use in the remanufacturing process to make another finished good.
Our core inventory consists of used cores purchased and held in our facilities, used cores that are in the process of being returned from our customers and end-users, and remanufactured cores held in finished goods inventory at our facilities.
−Removed: Our products that utilize cores include electronic control modules, hybrid batteries and complex mechatronics.
+Added: products that utilize cores include electronic control modules, hybrid batteries and complex mechatronics.
We believe our remanufactured parts offer end-users an economical and safe way to maintain their cars on the road, while also reducing the impact to environment.
10 unchanged sentences
Impact of COVID-19
−Removed: The COVID-19 pandemic has resulted and is expected to continue to result in significant economic disruption.
−Removed: COVID-19 caused state authorities to implement stringent measures to attempt to help control the spread of the virus, including business shutdowns and curtailments.
−Removed: Throughout the pandemic all of our U.S.
−Removed: facilities have remained, and currently remain, open and operating, with modified staffing in certain locations where appropriate.
−Removed: We have taken actions to promote the welfare of our employees by enhancing safety protocols.
−Removed: We have had to adjust our operations and inventory levels as demand has fluctuated due to government-imposed restrictions being imposed and then subsequently lifted or modified across the United States.
−Removed: As government-imposed restrictions vary and continue to change across the United States and elsewhere around the world, it remains difficult to determine the full impact that the pandemic will have on the overall demand environment as well as our ability to source parts and other materials to meet demand levels.
+Added: While COVID-19 did not adversely affect demand for our products for the year ended December 25, 2021, during the year we did experience pandemic-related pressures in the global supply network that caused logistical issues, including higher freight costs, supplier lead time delays of products and inflation with respect to materials and labor costs, which impacted our results.
+Added: As countries continue to combat COVID-19, and as government-imposed regulations regarding, among other things, COVID-19 testing, vaccine mandates and related workplace restrictions change around the world, there is still a risk that the pandemic may impact the overall demand environment as well as our ability to maintain staffing at our facilities, to source parts and other materials to meet demand levels, to maintain inventory levels and to fulfill contractual requirements.
+Added: We will continue to closely monitor updates regarding the spread of COVID-19 and its variants, the distribution of vaccines developed to combat COVID-19, and applicable vaccine mandates, and we will adjust our operations according to guidelines from local, state and federal officials.
+Added: In light of the foregoing, we may take actions that alter our business operations or that we determine are in the best interests of our employees, customers, suppliers and shareholders.
For a more detailed discussion of the impact of COVID-19 on our business, see “Human Capital Resources” below and ITEM 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Impacts of COVID-19.”
28 unchanged sentences
We also review and monitor our performance closely.
−Removed: In response to COVID-19, we implemented and continue to implement safety measures in all our facilities to promote the welfare of our employees.
−Removed: For example, we enhanced safety protocols, including requiring administrative employees to work from home where applicable, and we implemented symptom screening, social distancing and robust sanitization practices at our facilities.
−Removed: In addition, we adopted a COVID-19 sick leave policy providing continued salary and benefits to eligible employees.
−Removed: Inclusion and Diversity
+Added: In 2021, we adopted an environmental, health and safety policy outlining our commitment to policies and practices that support the health and safety of our employees, contractors and the community, and the protection of the environment in the communities where we operate.
+Added: We also implemented a human rights policy for the organization outlining our commitment to operating with respect for human rights.
+Added: In response to COVID-19, we implemented and continue to maintain enhanced safety measures in all our facilities to promote the health and welfare of our employees.
+Added: We provided employees with communications and education programs designed to encourage employees to get vaccinated against COVID-19 when eligible and provided on-site vaccination clinics at our facilities.
+Added: In addition, we maintain a COVID-19 sick leave policy providing continued salary and benefits to eligible employees.
+Added: Diversity and Inclusion
We embrace the diversity of our employees, including their unique backgrounds, experiences, thoughts and talents.
1 unchanged sentence
We strive to cultivate a culture and vision that supports and enhances our ability to recruit, develop and retain diverse talent at every level.
+Added: As part of our commitment to diversity,
+Added: in 2021, we appointed our first Vice President of Development and Diversity, responsible for leading our diversity and inclusion strategy.
+Added: Moreover, in 2021, we launched our “All In” initiative, a summit focused on inviting our employees to think and engage more with ideas such as diversity and inclusion to foster a collaborative environment.
+Added: As part of our commitment to a culture of inclusion, our Contributor Resource Group ("CRG") Program broadens and enhances company-wide interaction opportunities for our employees.
+Added: Our CRG is open to all and involves activities for employees whose background is the focus of the CRG and those who are supportive of the groups that have been formed.
+Added: These company-wide networks build on and coordinate with local teams that are already active in our operations and include groups such as those focused on the experiences of Women, Veteran’s, Multi-Cultural and Early Career Employees.
Talent and Development
−Removed: Our talent strategy is focused on attracting the best talent, recognizing and rewarding their performance while continually developing, engaging and retaining them.
−Removed: We focus significant attention on attracting and retaining talented and experienced individuals to manage and support our operations, and our management team routinely reviews employee turnover rates at various levels of the organization.
−Removed: Management also reviews employee engagement surveys to monitor employee morale and receive feedback on a variety of issues.
+Added: Our talent strategy is focused on attracting the best talent, developing their skillsets and experiences and rewarding their performance.
+Added: We focus significant attention on attracting and retaining talented and experienced individuals to manage and support our operations, and our leadership team routinely reviews employee turnover rates at various levels of the organization.
+Added: Leadership also reviews employee engagement surveys to monitor employee morale and receive feedback on a variety of issues.
We pay our employees competitively and offer a broad range of company-paid benefits, which we believe are competitive with others in our industry and in the geographies in which we compete for talent.
−Removed: In certain areas of our operations, such as our warehouse and distribution centers in Portland, Tennessee and Warsaw, Kentucky, we tend
−Removed: to see higher attrit ion rates among hourly workers than in our other locations, in large part due to competition from other warehouse and distribution operations nearby.
−Removed: We have implemented a number of benefits to help reduce employee tu rnover at those sites, such as counseling services and establishment of an employee relief fund .
+Added: We conduct an executive compensation benchmarking review annually to help ensure we are providing market-based compensation including base salary, short-term incentive and long-term incentives.
+Added: We also participate in annual compensation surveys for all positions and strive to compensate our top talent and key roles competitively.
+Added: Moreover, we believe our long-term incentives are structured in a manner to provide time-based vesting schedules that are retentive.
For information on risks relating to our human capital resources, see ITEM 1A, “Risk Factors – General Risk Factors – Losing the services of our executive officers or other highly qualified and experienced employees, or failing to attract and retain any of such officers or employees, could adversely affect our business.”
8 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.