Good morning, and thank you for standing by. Welcome to the Dorman Products Fourth Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. Please note, this conference is being recorded. I'd like to turn the conference over to David Hession, Dorman's Chief Financial Officer. Thank you, sir. Please go ahead. Thank you. Good morning, and welcome to Dorman's Fourth Quarter 2023 Earnings Conference Call. I'm joined today by Kevin Olsen, our Chief Executive Officer. First, Kevin will provide a business update, then I will review the quarterly and full-year financial results and provide our 2024 outlook, and then Kevin will provide closing remarks. After that, we'll open the call for questions. By now, everyone should have access to our earnings release and earnings call presentation, which went out yesterday after the market closed. These documents are available on the investor relations portion of our website at dormanproducts.com. Before we begin, I would like to remind everyone that our prepared remarks, earnings release, and investor presentation include forward-looking statements within the meaning of federal securities laws. We advise listeners to review the risk factors and cautionary statements in our most recent 10-Q, 10-K, and yesterday's release for important material assumptions, expectations, and factors that may cause actual results to differ materially from those anticipated and described in such forward-looking statements. We'll also reference certain non-GAAP measures. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are contained in the schedules attached to our press release and in the appendix to this earnings call presentation, both of which can be found on the investor relations section of Dorman's website. Finally, during the Q&A portion of today's call, we ask that participants limit themselves to one question with one follow-up, and to rejoin the queue if they have additional questions. And with that, I will turn the call over to Kevin. Thanks, David. Good morning, and thank you for joining us on our fourth quarter 2023 earnings call. Today, I will discuss our strategy, operating highlights, and business activity. Please turn to Slide 3 if you're following along in our deck. In Q4, we realigned our business along three segments, consistent with the sectors of the motor vehicle aftermarket in which we operate: light duty, heavy duty, and specialty vehicle. In connection with our transition to segment reporting, we are initiating live quarterly conference calls to provide additional insight into these segments and the overall company. Before we dive into Q4 performance, we thought it would be helpful to step back for a moment and review who we are as a company and what we do. Some of you have likely followed our story for years, but there are many listeners who are just getting to know Dorman. We are known as one of the leading innovators of repair solutions for the motor vehicle aftermarket. We deliver products from bumper to bumper across our legacy light-duty business, our commercial vehicle-focused heavy-duty business, and our UTV and ATV-focused specialty vehicle business. We are an engine of continuous innovation across each of these segments, and while our heavy duty and specialty businesses are relatively new additions to the portfolio, resulting from our acquisitions of Dayton Parts and SuperATV, we're very excited about what the future holds. Moving on to Slide 4, as I mentioned, we're leading the charge on innovation, and we think the capabilities and approach of our new product development team are unique. Over decades, our ideation team has built an immense network of relationships with repair technicians and end customers in the field that enable us to continuously cultivate a robust new product pipeline. Over the last three years, we've brought over 19,000 new SKUs to market across our three segments, such as our patented oil filter housing, a number of electronic control modules, and an OE FIX line of pre-pressed axles, many of which have enhanced features designed to solve repair problems created by the original equipment. The technical capabilities and experience of our new product development team enable us to provide a comprehensive suite of aftermarket solutions from bumper to bumper and across different drivetrains, from ICE to hybrid to BEV. We are truly agnostic to powertrain type. Our product development capabilities are further enhanced by our asset-light model that leverages our network of hundreds of suppliers globally. We utilize this diverse network to manufacture the vast majority of our products. With this approach, our team is able to work closely with our suppliers to ensure products meet our designs and specifications, and we have the ability to efficiently and effectively flex production up or down as needed to best serve the needs of our markets. Moving on to Slide 5. We leverage our new product innovation engine across an expansive total addressable market of $165 billion. We have a significant opportunity to grow our share of wallet with a wide range of leading aftermarket customers. Also, while our heavy-duty and specialty vehicle segments collectively contribute a quarter of our top line today, we're targeting growing those businesses to approximately 15% of top line each by the end of 2028. On Slide 6, you will find our strategy for driving growth and profitability by leveraging our innovation capabilities to bring thousands of new products to market annually. In light-duty, there's a significant focus on growing IP-centric categories like our advanced electronics, which have a large current OE share and premium margin potential. We see opportunities that draw on the digital investments that we've made to support our customers' omni-channel selling approach to continue to broaden our distribution reach. We're also taking actions to improve supply chain efficiency and optimize our distribution operations. In heavy-duty, we're implementing the same Dorman playbook that's been effective in our light-duty business. We're investing in new product capabilities to drive innovation and in our digital infrastructure to enable omni-channel presence, and we're optimizing our manufacturing operations and supply network. Turning to specialty vehicle, the acquisition of SuperATV gave us access to high-margin and rapidly expanding market, specialty, specialized transport vehicles. We've increased our focus on growing non-discretionary parts categories, including repair parts, which approximate 50% of this segment's net sales. We'll also continue to invest in the upgrade accessory categories that Super ATV is known for. Finally, we're focused on growing our presence with the vehicle dealers, particularly in regions where we're under-penetrated, such as the West Coast. As we look back on our performance over the last few years on slide 7, we've demonstrated a trend of top-line growth, disciplined investment, and cost control. From 2019 to 2023, our top line grew at an 18% CAGR, while we're also been prudent operators, as demonstrated by adjusted operating income growth above our peers. Before I hand it over to David, I wanted to provide you with my thoughts on our results. We ended the year with strong Q4 financial results, which were aligned with our guidance. We delivered record net sales and EPS and significantly improved our margins. For the year, we generated record free cash flow, continued to pay down our debt, and repurchase shares. Our innovation engine launched thousands of new products and solutions across all three segments, and we drove efficiencies into and cost out of our operations during the quarter. I'm proud of our contributors, who are the driving force behind our strong performance as they come to work each day focused on how we can deliver innovative solutions to the aftermarket. I want to thank them for their ingenuity, dedication, and hard work. Gross margin was a heightened focus area of the company in 2023. I'm pleased to report that our adjusted Q4 gross margin increased 640 basis points year-over-year and was up 180 basis points sequentially compared to Q3. Throughout the year, we managed through significant inflation and implemented productivity measures in our operations, which enabled us to push our margins back up to 2018 levels. Gross margin improvement was also the engine behind the strong Q4 free cash flow that we used to pay down our debt and repurchase our shares. Overall, Dorman continues to stand on strong financial footing. As I look forward, I'm optimistic about 2024. Industry fundamentals remain strong, and while there is a level of macro uncertainty in global markets that have the potential to impact near-term results, I believe we have the team and plans in place to deliver strong results in 2024. At this point, I'd like to turn things over to David so he can provide some deeper perspectives on our financial performance. Thanks, Kevin. I'll begin by discussing Q4 and 2023 results, then move to our balance sheet and capital allocation strategy, followed by our 2024 guidance. One note, our 2022 Q4 and full year results included a 53rd week. To make our results comparable, I'm gonna reference our Q4 and full year results against 2022 results, adjusted to remove the extra week. A table reconciling the reported results, the results excluding the 53rd week, is included in the appendix for the earnings presentation deck. Turning to slide 8. Q4 net sales were $494 million, a record and up 3% year-over-year. Sales growth was primarily driven by higher volume, including the introduction of new products to market and price increases to offset inflation. Moving to gross margin, this is the third straight quarter we've seen gross margin improvement. Our Q4 adjusted gross margin was 39.3%, a 640 basis point increase compared to last year. The year-over-year margin improvement was primarily due to lower cost inventory, cost savings initiatives, and pricing actions to offset inflation. Our Q4 adjusted gross margin gets us back to margin levels we had in 2018 before tariffs and inflation. Shifting to SG&A, adjusted SG&A expense was 23.9% of net sales, an increase of 90 basis points compared to last year. Higher wages, benefits, and variable compensation expenses were the primary drivers of the increase. Our Q4 adjusted operating income was $76 million, a 59% increase. Adjusted operating margin was 15.4%, up 550 basis points year-over-year. Finally, adjusted diluted EPS in Q4 was $1.57, a record and a 69% increase versus last year. The growth was mainly due to the increase in adjusted operating income, partially offset by a higher tax rate and higher interest expense, resulting from an increase in the variable rate of our credit facility. Please turn to slide 9. Full year net sales of $1.93 billion were a record and an increase of 13% year-over-year. Sales growth was primarily driven by the addition of SuperATV, price increases to offset inflation, and the introduction of new products to market. Net sales growth, excluding the impact of acquisitions, was 3%. Full year adjusted gross margin increased 200 basis points to 36.1%. The same drivers that powered Q4 margin improvement also drove the full-year margin expansion. Adjusted SG&A as a percentage of net sales was 24%, up 280 basis points year-over-year. The higher percentage was due to the inflationary impact on wages, benefits, and incentive compensation expenses, an increase in interest rates on our factoring programs, as well as the addition of SuperATV. Our 2023 adjusted operating income was $233 million, an increase of 14%. Finally, our adjusted diluted EPS was $4.54, a 3% decrease due to the higher interest expense and a higher tax rate. Let's move on to review our segment results, starting on slide 10. Q4 light-duty net sales were $386 million, a 4% increase. Overall, light duty industry fundamentals remain strong, and we're encouraged by our performance in the quarter, recognizing we were up against a strong prior year comparable. Compared to 2021, Q4 net sales were up 13%. End user demand for our products remained healthy. Based on our estimates, our customer point of sale outpaced our shipments in the quarter. Light duty adjusted operating margin was 16.6% in Q4, a 750 basis point improvement year-over-year. High cost inventory due to rapid inflation in 2022 created margin pressures that lasted into Q1 of 2023, but have abated over the last three quarters. Pricing actions and cost savings initiatives to cover these inflationary costs also contributed to the margin improvement. After a challenging first half, the light duty business had a strong rebound. Moving on to heavy duty on slide 11, net sales were $57 million in Q4, a 9% reduction year-over-year against a strong prior year comparable. During Q4 of 2022, we benefited from the customers restocking inventories as global supply chains rebounded from the impact of the global pandemic. In addition, we believe trucking demand was lower in 2023, resulting in reduced demand for replacement parts. Heavy duty adjusted margin was 6.8%, a 240 basis point decrease year-over-year. Margin continued to be negatively impacted by the sell-through of high-cost inventory that was sourced during peak inflationary times. As we work our way through this inventory and the cost savings and pricing actions taken to offset these inflationary costs go into effect, we expect to see margin expansion like the 380 basis point increase we saw in Q4 compared to Q3. Finally, as Kevin discussed earlier, we've made investments to grow sales and improve margins long term, which may negatively impact operating margin in the near term. Shifting to specialty vehicle on slide 12, our Q4 net sales were $51 million, up 3% year-over-year. 2023 was our first full year of ownership of SuperATV, and we're proud of its performance. 2023 was a challenging year for the specialty vehicle industry overall. That's particularly true for the sales of discretionary accessories, which we estimate make up 50% of this segment's sales. Discretionary accessory sales are partially driven by dealer sales of new machines, which we estimate were slightly down year-over-year. So while we experienced softness due to these market factors, we grew 3% against these headwinds. We accomplished this growth through initiatives focused on growing our non-discretionary repair parts business, capturing share in the retail channel through promotional initiatives, and expanding our dealer network, specifically in the western region. Specialty vehicle operating margin is 15.7%, a 150 basis point decline year-over-year, due to one-time non-cash charges. Absent these charges, operating margin would have been consistent year-over-year. Switching our attention to cash flow, as you can see on slide 13, Q4 free cash flow was $49 million, a healthy increase from the $2 million of cash used last year. The improvement was driven by a $32 million increase in net income compared to 2022. Capital expenditures in the quarter of $11 million were $3 million lower than last year, which included investments to fit out our new distribution center in Whiteland, Indiana. Full year free cash flow of $165 million was a record and a $161 million increase over 2022. The primary driver for the improvement was inventory, which decreased $119 million. Lower freight and material costs, combined with a reduction in our safety stock levels made possible by a rebound in the global supply chain, drove our inventory low. I'll turn next to our balance sheet and liquidity on slide 14. During the year, we used our record operating cash flows to pay down $159 million of debt. As of December 31, our net debt was $540 million, and our net leverage ratio was 1.87 times adjusted EBITDA. Additionally, we had $543 million of total liquidity, including cash on hand. We believe our strong balance sheet positions us well to execute our strategic initiatives and provides us with flexibility in the event of unforeseen challenges. As shown on slide 15, our capital allocation strategy strikes a balance between reinvestment in the business, inorganic growth, and return of capital to shareholders. Our longer-term goal is to maintain leverage below 2 times adjusted EBITDA, or less than 3 times in the first year following an acquisition. We'll continue to support our product innovation as a primary investment objective by funding necessary R&D and capital expenditures. We remain opportunistic regarding M&A, but ultimately consider it a core supplement to our organic growth. In addition, we believe using some of our free cash flow to opportunistically repurchase shares is a good use of our capital if other higher return opportunities aren't available. Before I shift to guidance, I have one final point on our performance. We're proud of our strong results in 2023, but are always striving to do better. Following the integration of two sizable acquisitions over the last two years, combined with being more efficient now that we're back to more normal operating conditions, we determined there was an opportunity to drive further efficiencies across the company. As a result of that assessment, in the first week of February, we enacted a company-wide reduction in workforce program to streamline our business. We don't expect this program to have a negative impact on our innovation, new product efforts, or our ability to service our customers. The estimated charge for this program is $5 million, and we forecast that it will yield $10 million of annualized savings. The expected partial year savings impact from this program is included in our 2024 guidance. The one-time $5 million charge will be included in our Q1 diluted EPS, but excluded from adjusted diluted EPS. Now, I'd like to share our 2024 guidance included on slide 16. We expect continued strong fundamentals in the light-duty market in 2024, with shipments and customer POS more closely aligned as we move through the year, but still lagging in Q1. Seasonally, Q1 is also the light-duty segment's lowest quarter of the year. Because of these factors, we anticipate relatively flat sales growth in Q1 before we see improvement in Q2 and through the second half of the year. For heavy duty, after a challenging 2023, we expect the soft market to continue through the first half of 2024. In this environment, we're focused on taking share and growing our business with trucking fleets, who rely on us to help improve their bottom lines. Driving new product growth will also be a key area of focus. Finally, we expect to see a similar first half trend play out in the specialty vehicle market. The dealer channel is expecting a slow rebound in sales through the first half of 2024, and we also expect demand in the direct-to-consumer business to be relatively flat in the first half. However, the specialty vehicle team is focused on taking shares from new product launches geared around non-discretionary repair parts, adding new direct-to-consumer customers, and building new dealer relationships. Based on these expectations, we're targeting consolidated full-year net sales growth of 3%-5%. We expect our 2024 adjusted diluted EPS to range from $5.40 to $5.70 a share, or a 19%-26% increase. Over the course of the year, we expect operating margin improvement as the savings from the Q1 reduction in the workforce program and other cost savings initiatives take hold. The benefits of these programs are expected to be partially offset by investments we're making to further diversify our supply chain, as well as higher inflationary costs, such as ocean freight and employee benefit costs. Anticipating the question may be forthcoming, I thought I'd get out ahead of it and let you know that we're not issuing guidance at the segment level. With that, I'll turn it back over to Kevin to conclude. Kevin? Thanks, David. As we close out our fourth quarter and lean forward into 2024, I'm confident in our ability to continue to drive innovation, to capitalize on the breadth of our diverse portfolio across segments, and to draw on the many strengths and deep commitment of our team members. As we've proven year after year, we've continually found new ways to grow our business through new product categories, new markets and customer channels, and our operating discipline. I would now like to open the call for questions. Operator? Thank you. If you would like to ask a question, please press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press star one. We also ask that you limit yourself to one question and one follow-up, and for any additional questions, please re-queue. Your first question comes from the line of Scott Stember from Roth MKM. Please go ahead. Good morning, gentlemen, and thanks for taking my questions. Could you guys maybe talk about the cadence of end demand throughout the quarter? We heard from some retailers, a competitor of yours, talking about how December things started to dip, but seems like things are coming back in January. And again, this is on the light-duty side. Maybe just comment on it. Sure, Scott. Great question. Yeah, we actually saw a very stable cadence as we moved through the fourth quarter. Our POS or out-the-door sales of our products through our customers was actually up about 6.5% in the quarter. And if you look at December, it was roughly around that same amount. So we didn't. We kind of saw the same cadence. I'd also point out that, you know, on the LD side, our sales growth was only 4%, so we're still running a gap of POS to sell-in growth as a result of inventory adjustments, you know, kind of across our customer base. Got it. Next question, that 6.5%, is that on a same-day basis, adjusting for the extra or one less week this year? And if not, what would that have been on a same-day basis? No, that's adjusted, Scott. Okay. So it's apples to apples. Apples to apples. Perfect. All right, I'll get back into the queue. Thank you. Your next question comes from the line of Bret Jordan from Jefferies. Please go ahead. Hey, good morning, guys. Hey, Brett. Hey, Brett. On the sales growth forecast for 2024, 3%-5%, could you talk about what you expect to be pricing in that? Yeah, good question, Brett. You know, there's certainly, you know, solid growth in the 3%-5%, but, you know, there's some volume in there, there's some price in there, but for competitive reasons, Brett, we don't break out the, split. But, but included in the 3%-5% is, is some volume along with some pricing. Okay. I'll just add to that, Brett, that, you know, as we kind of look at 2023, we saw roughly the same thing. There was clearly some price growth across the industry in 2023, but we actually saw unit growth both for the full year and for the fourth quarter. Okay, great. And then on the light-duty business, could you talk about, in that mix, how much is new to the aftermarket, sort of proprietary product versus, you know, things like full-line product, more in line with your chassis business? You know, because just so we can break out what's, you know, higher margin mix versus sort of more of the middle of the road. Yeah. We don't, we don't break out kind of the different categories in that fashion, Brett, publicly. I will say, though, that, you know, if you kind of look at the SKUs that we launched in a year, like, take 2023, for example, we launched just over 6,000 parts. Roughly 30% of those SKUs would be considered new to the aftermarket. Okay. Want to tell me what the gross margin spread in that 30% versus the balance is? Yeah. No, Brett, we don't, we don't break out gross margins, either by customer or by, by category. I thought we're doing calls now. We're gonna get all this new information. I appreciate it, guys. Thanks, Brett. If you'd like to ask a question, please press star one on your telephone keypad. Your next question comes from the line of Gary Prestopino from Barrington Research. Please go ahead. Hi, good morning, Kevin and Dave. Hey, Dave, one thing you didn't touch upon in your commentary was factoring in the quarter. Could you give us some idea of how much you factored and what was the cost into SG&A for the factoring? Sure, Gary, and as you know, that'll all be included in the K. But the factoring in the quarter was $12.6 million in Q4 2023, compared to $14.2 million last quarter, so down $1.6 million. And it's basically all volume, Gary. The rate was essentially the same year over year, but we factored $236 million, which was down $34 million from last year. Okay. As we go forward, if, if you just say, hypothetically, keep the same factoring level on a quarterly basis, if you get a 25 basis point decline in interest rates, how is that gonna impact the expenses related to factoring? Yeah. So I can give you. If you get a 1% change in factoring costs on an annual basis, it's about $8 million, Gary, so, you know, quarter point would be roughly $2 million. Okay. That's really helpful. Thank you. I'll get back in the queue. Sure. Your next question comes from the line of Scott Stember from Roth MKM. Please go ahead. Just a quick follow-up. Just looking at the guidance, from an operating margin standpoint, you guys were running, I guess, north of 15% coming out of the fourth quarter, coming out of the year. But if you look at your guidance, it looks like it's expecting less than that, a couple hundred basis points. Are you guys just being conservative, or is there anything else out there that we should be aware of? ... No, Scott, I think if you, if you look at the guidance, right, the top line is 3%-5% growth, and as we said in the prepared remarks, we expect there to be some operating margin improvement as well. You know, if you look at that, there's gonna be the benefit of the reduction in workforce and the cost savings initiatives. Yeah, that'll be partially offset by some of the investments we're making to diversify our supply chain, as well as some inflationary pressures, you know, particularly ocean freight and benefits. But no, it's, there's growth included in the guide. Got it. Thank you. Sure. Your next question comes from the line of Gary Prestopino from Barrington Research. Please go ahead. Yeah, I think I'm gonna try and ask this question on new SKUs a different way than what was asked. Historically, about 17% of your sales have come from new SKUs over the last three years. Did that change materially throughout 2023? And are you expecting that to kick up in 2024, given your ability to get new products out in the market? Hey, Gary, it's Kevin. Good question. Yeah, we haven't disclosed that number in a few years, but I would say, you know, the model has not changed, nor the cadence of new products as a percent of our total business. I mean, I would say that, you know, the one factor that has changed over the last few years is that, you know, our chassis business, which is, you know, a large, mature, slower growing line, is a much bigger portion of our total business. But in terms of our focus on kind of the small niche categories, new to the aftermarket focus, that has not changed, and frankly, the volume has not changed. Okay. And then just from what you're saying about with your guidance, with the quarterly sequence, stronger top line in the back half of the year and continued growth in adjusted EPS in the back half of the year, despite some... You have some challenging comps there, because in 2023, you've, you know, pulled off some good numbers in the back half of the year? Yeah, Gary, I think if you look at, light duty, you know, we said it's gonna be relatively flattish in Q1, the improvement in Q2 into the second half, and then both heavy and specialty, we expect to see a softer first half, with improvements coming in the second half. So yeah, I think if you look at that, the pacing is gonna be the growth is gonna come more in the second half than the first half. Okay. Thank you. Sure. Your next question comes from the line of Brett Jordan from Jefferies. Please go ahead. Hey, on that same topic, I guess, as we look at flat light duty in the start of the year, and I think you'd said heavy duty, challenging and especially slow in the first half. Should we not factor in EBIT expansion in the first half? Most of this growth is gonna come when you get sales leverage going into the second half of the year. Yeah, Brett, the first quarter is typically our, you know, lowest quarter, mainly driven by the light duty segment. But now the margin growth will be, after the first quarter, you know, ratable over the course of the balance of the year, but obviously, coming a little bit heavier in the second half. Okay. And then you talked about $119 million in inventory safety stock reduction. Are your fill rates or your, I guess, as you measure your fill rates, consistent? You know, is your flow of product improved enough that you don't need to carry that, or has it had any impact on your availability? Yeah, I mean, Brett, it's Kevin. I mean, our fill rates are back to kind of pre-supply chain disruption levels. You know, the reason that we had to take on, you know, additional inventory was because our lead times had just grown so much. You know, getting a product from Asia, manufactured on a boat, find a container on the ocean, getting through the ports, getting to our locations, was taking a lot longer than kind of the pre-supply chain disruption. That's kind of back to normal, so we were able to just reduce back to our normal safety stock levels. Plus, you also had a lot of costs running off the balance sheet as well. That inflation that gets hung up on the balance sheet and inventory has rolled off as well. Okay. I guess on that same supply chain question, you talked about, I think, some investment in, in possibly sourcing from, from new markets. Is that something, I guess, could you give us some updates as far as where we are, alternative low-cost supply markets versus where you are today geographically? Yeah, I mean, it's ongoing, right? It's been ongoing for a couple of years now. You know, we did talk about the investments, which I would categorize as moderate, and those investments have been going on for the better part of two to three years. You know, we have reduced our exposure to China, Taiwan over the last couple of years, and we expect to continue to do that. We're not gonna give any details in terms of, you know, what percentage, in what country. I'll just tell you that, it's wide-ranging, whether it's a Pac Rim or India or Mexico or Turkey or other locations around the globe. We continue to look to de-risk our supply chain. Great. Thank you. That does conclude our question and answer session, and that does conclude our conference call for today. Thank you for your participation, and you may now disconnect.