 Highlights: Net sales of 233.2 million, down 8.3 compared to 254.2 million in Q2 2019. Order volume was down early in the quarter compared to prior year and improved throughout the quarter ending with a strong June that has continued through July. Diluted earnings per share EPS on a GAAP basis of 0.43 compared to 0.66 in Q2 2019. Adjusted diluted EPS of 0.47 compared to 0.68 in Q2 2019. Dorman remains well-positioned to navigate the ongoing COVID-19 pandemic with a strong balance sheet and ample liquidity.COLMAR, Pa., July 29, 2020 GLOBE NEWSWIRE -- Dorman Products, Inc. the Company or Dorman NASDAQ:DORM, a leading supplier in the automotive aftermarket industry, today announced its financial results for the second quarter ended June 27, 2020.2nd Quarter Financial Results The Company reported second quarter 2020 net sales of 233.2 million, down 8.3 compared to net sales of 254.2 million in the second quarter of 2019. While customer orders dropped significantly in April 2020 due to government-imposed restrictions designed to slow the spread of COVID-19, the Company saw a rapid recovery as the quarter progressed with May orders flat to the prior year period and June orders up significantly above the prior year period. The total estimated negative impact of COVID-19 on net sales was approximately 14 to 16 in the second quarter.Gross profit was 79.1 million in the second quarter of 2020 compared to 87.1 million for the same quarter last year. Gross margin for the second quarter was 33.9 compared to 34.3 in the same quarter last year. Adjusted gross margin was 34.1 in the second quarter compared to 34.3 in the same quarter last year. Gross margin and adjusted gross margin were lower primarily due to incremental costs associated with COVID-19, including costs related to safety measures implemented at our sites and our COVID-19 sick leave policy.Selling, general and administrative SGA expenses were 61.5 million, or 26.4 of net sales, in the second quarter of 2020 compared to 59.9 million, or 23.6 of net sales, in the same quarter last year. Adjusted SGA expenses were 60.3 million, or 25.9 of net sales, in the quarter compared to 59.0 million, or 23.2 of net sales, in the same quarter last year. Approximately 220 bps of the increase in SGA as a percentage of net sales was due to decreased leverage resulting from the 21 million decline in net sales compared to the second quarter of 2019. SGA as a percentage of net sales also increased 180 bps due to 4.2 million of incremental out-of-pocket costs directly related to COVID-19 incurred in the second quarter, primarily from factoring costs, costs related to safety measures at our sites, and our COVID-19 sick leave policy. These increases in SGA as a percentage of net sales were offset by cost savings primarily from productivity improvements in our Portland, TN distribution facility, as well as reduced travel expenses. In the second quarter, we marked the one-year anniversary since we began consolidation activities at our Portland distribution facility, and productivity levels at that facility have improved and costs are returning to typical levels, in-line with our expectations.Income tax expense was 3.4 million in the second quarter of 2020, or 19.9 of income before income taxes compared to 5.8 million, or 21.1 of income before income taxes, recorded in the same quarter last year. The decrease in effective tax rate in the second quarter is primarily related to an equity method investment converted to a consolidated subsidiary, which occurred in the first quarter of 2020.Net income for the second quarter of 2020 was 13.9 million, or 0.43 per diluted share, compared to 21.5 million, or 0.66 per diluted share, for the same quarter last year. Adjusted net income in the second quarter was 15.2 million, or 0.47 per diluted share, compared to 22.2 million, or 0.68 per diluted share, in the prior year quarter.Kevin Olsen, Dorman Products President and Chief Executive Officer, stated, I want to first thank all of our contributors for their extraordinary work during these unprecedented times. Their health and safety, and that of our business partners and customers, remains our utmost priority and I am proud of our contributors dedication and focus on execution despite the challenges from the pandemic. A great example of this is our contributors extraordinary efforts to ensure that the launch of the previously announced major premium chassis program we won with a large national customer remained on schedule and began shipping in June. Our solid performance in the second quarter underscores the resiliency of our business and the industry in which we operate. While our results in April were impacted as expected by stay-at-home orders and government restrictions across the country, our performance improved significantly as we moved through the quarter. Order rates bottomed out in late April and improved steadily throughout the remainder of the quarter with June year-over-year growth rates being up high teens, which continued through July, led by strong Do-It-Yourself consumer demand. Also, despite the pandemic, we continued to make progress on our strategic initiatives in the quarter, as Heavy Duty net sales performed in line with the rest of the business and finished the second quarter with strong growth in the month of June, and our innovation teams continued to develop new products and solutions for our customer base. Further, we maintained disciplined cost control and are pleased to report that our Portland distribution center costs are normalizing.Non-GAAP measures. See Non-GAAP Financial Measures supplemental schedules for further discussion and reconciliation to the most directly comparable GAAP measure.COVID-19: Business Impact Update The safety and health of our contributors, business partners and customers remain our top priority. As a designated essential business, our facilities have been open and operating during the initial phase of the government-imposed shutdowns and have continued operating as those restrictions have changed or been lifted. We are maintaining stringent sanitization practices and safety measures to promote the wellbeing of our contributors in all of our facilities, while our administrative contributors continue to work remotely, where applicable. We are closely monitoring updates from local, state and federal authorities, and will adjust our operations as necessary.Our balance sheet remains healthy and strong, and, as we have continued to assess the impact of COVID-19 on our business, we have taken the following actions: During the second quarter of 2020, we increased the typical level of receivables collected under our factoring program by 163 million, incurring an additional 3.3 million in factoring cost above typical levels, to bolster our liquidity; We continued to adjust operating costs by limiting non-essential operating expenses, adjusting labor hours to align with demand levels where possible, and deferring capital expenditures where we have deemed appropriate to do so; and Early in the third quarter of 2020, we repaid the 99 million outstanding under our revolving line of credit that had been drawn down in March 2020 to enhance our liquidity.As a result of these actions, Dorman generated 201 million of cash from operating activities in the second quarter of 2020, and, as of July 28, 2020, had no amounts drawn under its revolving credit agreement excluding 0.8 million of issued but undrawn letters of credit and approximately 230 million in cash and cash equivalents.During the second quarter, we estimate that we incurred 4.9 million of incremental out-of-pocket costs related to COVID-19, primarily from factoring, costs related to safety measures implemented at our sites, our COVID-19 sick leave policy, and interest on our revolving line of credit, with 0.5 million impacting gross profit, 4.2 million impacting SGA, and 0.2 million impacting interest expense. The Company estimates that the negative impact on second quarter results from the COVID-19 pandemic to be approximately 14 to 16 on net sales, and 0.35 to 0.40 of diluted earnings per share, primarily due to the decline in net sales and out-of-pocket costs, mainly increased factoring to strengthen our balance sheet.Mr. Olsen continued, During the second and beginning of the third quarter, Dorman took a number of proactive measures to maintain what we believe is a best-in-class balance sheet and liquidity position, which, when combined with our asset-light model, position us well to manage potential headwinds related to the COVID-19 crisis and operate under a number of economic scenarios. While the overall environment remains uncertain, I am extremely pleased with our results for the quarter and the continued strong demand levels weve seen through July. Our contributors have shown great resiliency and we look forward to continuing to play our part in the critical task of keeping cars on the road.2020 Guidance Due to the ongoing uncertainty of the economic environment, it remains difficult to determine the full impact that the pandemic will have on overall demand and Dormans operations. Therefore, Dorman is not providing guidance for the remainder of fiscal 2020 at this time.Share Repurchases Dorman has temporarily halted its share repurchase program as it navigates uncertainty in the COVID-19 environment and did not repurchase any shares during the second quarter of 2020. However, the Company may resume the repurchase program at any time when the Company believes it is prudent to do so and without further notice.About Dorman Products At Dorman, we give repair professionals and vehicle owners greater freedom to fix cars and trucks by focusing on solutions first. 