Dorman Products, Inc. (DORM) Risk Factors

ITEM 1A. Risk Factors

In addition to the other information set forth in this report, you should carefully consider the following factors, which could materially affect our business, financial condition, or future results. The risks described below, which are listed in no particular order, 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 affect our business, financial condition, or results of operations.

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Risks Related to Our Business

Our Industry, Operations, and Competition

Our business is impacted by the age, condition, and number of vehicles that need servicing and by improvements in the quality of new vehicle parts.

The size of the motor vehicle aftermarket industry depends on factors such as the number of vehicles on the road, average vehicle age, change in total miles driven, regulatory changes, pricing of new and used vehicles, vehicle and component quality and warranties and maintenance programs. We believe that industry demand may be negatively impacted as vehicle and component quality improve, which could reduce part replacement frequency. Enhancements to the duration or scope of warranties and maintenance programs offered by OEMs may also further reduce demand for our products. These factors could have a material adverse effect on our business, financial condition, and results of operations.

Our industry is highly competitive, and our success depends on our ability to compete with suppliers of motor vehicle aftermarket products, some of which may have greater financial, marketing, and other resources than we do.

The motor vehicle aftermarket industry is highly competitive, and our success depends on our ability to compete with domestic and international suppliers of aftermarket products. We compete against a broad range of companies (public and private, large and small) and brands, including, but not limited to, Standard Motor Products, Inc., Tenneco, Inc., TrakMotive, Bosch Auto Parts, Gates Corporation, Continental Automotive Systems, Inc. (VDO), MevoTech LP, ACDelco (owned by General Motors Company), Motorcraft (owned by Ford Motor Company), Cummins Inc. (following its acquisition of Meritor, Inc.), Automann Inc., WARN Industries (owned by LKQ Corporation), Rocky Mountain ATV/MC, and numerous category specific competitors. We also face competition from OEMs, through their dealer networks, and from some of our customers whose private-label brands compete with ours.

Competitors that have larger customer bases and greater financial, technical, and marketing resources may:

• respond faster to new technologies and changing customer needs;

• engage in more extensive research and development;

• offer lower product prices;

• exercise broader marketing campaigns; and

• provide more attractive terms to customers and strategic partners.

We cannot assure you that competitors will not (i) adopt fast follower strategies, based on our new product launches, (ii) develop products or services that are equal or superior to our products, or that achieve greater market acceptance than our products, or (iii) expand into our product lines. Such risks may be compounded by the availability and use of artificial intelligence ("AI") by our competitors. We also cannot assure you that additional companies will not enter our industry or that companies in our industry will not consolidate. These events could pressure us to offer customers better pricing or contract terms to retain business or cause us to lose market share, which, in turn, could have a material adverse effect on our business, financial condition, and results of operations.

The loss or decrease in sales among one of our top customers, or a material change in the terms on which they are willing to buy from us, could have a substantial negative impact on our sales and operating results.

A significant percentage of our sales are concentrated among a relatively small number of customers. In 2025, two customers each represented more than 10% of net sales and together accounted for approximately 40% of net sales. We anticipate that this concentration of sales among these customers may continue in the future. The loss of a significant customer or a substantial reduction in purchases or a change in buying behaviors of a significant customer could have a material adverse effect on our sales and operating results. Customer consolidation may further increase this risk.

Although we may enter into long-term agreements with certain of our customers, these typically lack purchase commitments and instead rely on individual purchase orders. We have in the past, and may in the future, lose customers or lose a particular product line of a customer due to competition in the industry, customer consolidation, and customer initiatives to buy direct from our suppliers. Given the size and scale of some of our

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customers, their ability to forge direct relationships with our suppliers could cause those customers to reduce their purchases from us or to cease purchasing from us altogether. A decision by any significant customer to materially decrease the amount of products purchased from us or the number of our product lines they choose to carry, to change their manner of doing business with us, or to stop doing business with us, could have a material adverse effect on our business, financial condition, and results of operations.

Because of this customer concentration and intense competition, we often are under pressure from our customers to lower prices, extend payment terms, increase marketing and transportation allowances, provide enhanced rebates, discounts, rights of return and credits, and offer customers other more favorable terms. If and when we meet these customer demands, they adversely impact our operating margins and profitability and could have a material adverse effect on our business, financial condition, and results of operations.

Our industry faces intense price competition, and our success depends on maintaining a competitive cost and price structure.

Our industry faces intense price competition. Our competitors strive to attract business in many ways, including by growing their e-commerce platforms, sourcing from countries with more favorable U.S. tariff and trade treatment, and lowering their prices. To remain competitive, we may need to reduce prices, which could impact our margins. Our ability to maintain or improve our margins depends on, among other things, enhancing manufacturing and distribution efficiency, managing product and channel mix, further diversifying our supply chain, passing through cost increases (including tariffs) where possible, and achieving cost reductions from suppliers, such as by reducing the costs of components used in our products. Our inability to maintain a competitive cost structure could have a material adverse effect on our business, financial condition, and results of operations.

Our business depends on the ability of our customers to grow their businesses and compete effectively.

Our business depends on the ability of our customers, such as retailers, dealers, distributors, installers, and specialty markets, to grow their businesses and compete effectively. If they fail to do so, their demand for our products may decline.

Our customers’ growth and competitiveness can be affected by, among other things:

•Technological Changes: Increasing vehicle complexity may require our customers to make investments in training and tools, and failure to adapt may reduce their ability to compete.

•Competitive Pressures: Increased competition from existing or new market entrants (e.g., the growth of e-commerce) could erode our customers' market share, impacting their business performance and, consequently, their demand for our products.

•Shelf Space Limitations: Limited retail space forces our products to compete with other aftermarket items, including unrelated products. The failure of our customers to increase their shelf space or grow in new locations may adversely impact their demand for our products.

If our customers cannot grow their businesses or maintain their ability to compete, they may face reduced sales, increased credit risk, and potential loss of business, which, in turn, could have a material adverse effect on our business, financial condition, and results of operations.

Customer consolidation in the motor vehicle aftermarket industry may lead to customer contract terms less favorable to us, which may negatively impact our financial results.

The motor vehicle aftermarket industry has been consolidating over the past several years, resulting in some of our customers having grown larger and having more leverage in negotiating agreements to buy products from us. They may ask us to lower prices, provide extended payment terms, issue customer credits, and accept returns of slow-moving product to obtain new, or retain existing, business. While we seek to limit such concessions, in some cases customer payment terms have been extended, enhanced credits have been issued, and returns of product have exceeded historical levels. Returns and credits reduce net sales and profitability, while longer payment terms and factoring costs reduce operating cash flow and require additional capital to finance our business. We expect these trends to continue, which could materially adversely affect our business, financial condition, and results of operations.

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Our growth in the specialty vehicle category depends upon our continued ability to expand product sales into specialty vehicles and on overall market growth.

Following our acquisition of SuperATV, a portion of our sales comes from aftermarket parts and accessories for specialty vehicles, such as UTVs and ATVs. Success requires continued market expansion, creation of new vehicle classes that benefit from our products, and our ability to develop products for these markets. If specialty vehicle markets stagnate or contract due to economic conditions, shifting consumer preferences, or other factors—or if we fail to innovate or competitors gain market share—our growth could be limited and sales could decline, which could materially adversely affect our business, financial condition, and results of operations.

If we fail to maintain sufficient inventory to meet current customer demands, or if we fail to anticipate future changes in customer demands, our financial results could be adversely affected.

We must maintain adequate inventory and anticipate changes in customer demand to meet current and future needs. Failure to do so could adversely affect our financial results. Demand fluctuations may result from global economic conditions, vehicle age and condition, part failure rates, introductions of new products by competitors, market share changes, and improvements in product quality and reliability. As a result of these and other factors, we have experienced and expect to continue to experience fluctuating levels of demand that require us to monitor, and, where appropriate, adjust our operations, including our inventory levels and staffing at our facilities. Inaccurate forecasting can lead to excess or obsolete inventory, workforce reductions, or, conversely, inventory shortages and insufficient staffing. Shortfalls may prevent us from fulfilling orders on time, result in fill-rate penalties, and cause lost sales. These risks could materially adversely affect our business, financial condition, and results of operations.

Our profitability may be materially adversely affected by customer overstock returns exceeding anticipated levels.

We allow certain customers to return new, non-defective, or non-obsolete inventory within limits generally based on a percentage of their annual purchases. We accrue for these returns as a percentage of net sales, using historical trends and estimates in accordance with our revenue recognition policies. However, actual returns may differ from estimates. If overstock returns materially exceed our accruals and expectations, it could have a material adverse effect on our business, financial condition, and results of operations.

Our operations may be materially and adversely affected if our suppliers fail to perform or if we cannot manage our supply chain effectively.

Our operations depend on effective supply chain management and supplier performance. We purchase raw materials, finished goods, equipment, and component parts from various suppliers, and failure by these suppliers—due to delivery delays, non-conforming products, insolvency, bankruptcy, or other reasons—could materially adversely affect us. Supplier risks include raw material availability and cost, political instability, tariffs, trade disputes, embargos, new regulations, military conflict, natural disasters, work stoppages, and health crises. Furthermore, because certain products we sell contain parts that are or can be recycled and remanufactured – parts more commonly referred to in our industry as “core” – our ability to sell those products may be materially and adversely affected if we are unable to obtain those core parts from our suppliers on favorable terms, if at all.

Replacing or transitioning suppliers may cause production delays, quality issues, increased costs, and inventory shortages. For example, we may experience delays as new suppliers are qualified or as tooling is moved or replaced. Furthermore, the replacement of a key supplier or transitioning to a new supplier in a different geography may result in production delays, product quality issues, or increased expenses, which could result in inventory shortages or lower profit margins. Overall, our efforts to mitigate these risks may not always succeed, and disruptions could materially adversely affect our business, financial condition, and results of operations.

Our operating results are sensitive to the availability and cost of third-party logistics providers, which are important in the manufacture and transport of our products.

We receive product shipments from our suppliers, and we ship products to our customers. As a result, our operating results depend on the availability and cost of third-party logistics providers, including ocean freight, port operators, railroads, and trucking carriers. Access to these providers is not guaranteed, and adverse market conditions or infrastructure disruptions may prevent us from transporting products at competitive rates. Events such as strikes, political instability, trade disputes, war, terrorism, natural disasters, adverse weather, congestion, fuel price increases, and health crises can impact logistics capacity and costs. For example, in 2024, continued political conflict near the Suez Canal disrupted shipping routes and increased costs. Long-term contracts may also create risk if demand

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forecasts are inaccurate, leading to excess capacity costs or reliance on expensive spot-market purchases. Changes in transportation mix can further affect logistics costs. If we cannot pass increased costs to customers or if capacity declines significantly, our business, financial condition, and results of operations could be materially adversely affected.

Significant inflation could adversely affect our business and financial results.

Significant inflation, including rising costs for raw materials, transportation, labor, energy, and financing, may adversely impact our operations and financial performance. In recent periods, inflation has driven up the cost of key inputs such as steel, aluminum, copper, and rubber—materials essential to the production and distribution of aftermarket parts. Additionally, increased tariffs on imported goods have further exacerbated costs.

While we strive to mitigate these impacts through strategic sourcing, operational efficiencies, and price increases, there can be no assurance that we will be able to fully offset rising costs. In addition, such initiatives may not provide immediate relief from such pressures. For example, starting in the third quarter of 2025, we implemented pass-through price increases to offset the dollar impact of certain new tariff costs. As a result, during the second half of 2025, we experienced a temporary increase in gross margin in 2025 due to the price increases taking effect before the increased cost of inventory, reflecting higher tariffs, was recognized as an expense in our statement of operations. Furthermore, in general, pricing increases that we implemented to pass through the increased costs had no added profit dollars and consequently did not fully offset the impact that the increased costs had on our gross and operating margin percentages.

Inflation in general, and the increased price of our products resulting from pricing efforts to offset the impact of tariffs, may reduce customer purchasing power and result in lower demand for our products. In addition, our gross margins may be compressed, and our competitive position could be weakened, by inflationary pressures, especially if competitors are able to absorb cost increases more effectively. These factors could materially and adversely affect our business, financial condition, and results of operations.

Changes in U.S. trade policy, including tariffs and related actions, could adversely affect our business and results of operations.

In 2025, approximately 77% of our total volume of purchases of products was sourced from non-U.S. suppliers, with approximately 38% sourced from China, making us vulnerable to tariff increases and trade restrictions. Recent U.S. tariffs on steel, aluminum, copper, and certain vehicle parts have raised costs, and further tariffs or retaliatory measures from U.S. trading partners could further increase prices, reduce demand, and negatively impact global trade. If we cannot pass these costs to customers or otherwise mitigate them, our financial results could suffer. In addition, when increases are made to U.S. duty rates or tariffs, reciprocal action by other countries sometimes occurs, and any such increases could impact the price of our products and cause a decline in the demand for our products.

We have in the past, and expect to continue to, incur significant costs to comply with trade laws imposing tariffs on products imported into the U.S. However, our competitors may not comply and may engage in transshipping to avoid tariffs and import competing products at lower costs than ours. If illegal transshipments are not monitored and enforcement is not effective to limit them, we may not be able to compete effectively, and that could have a material adverse effect on our business, financial condition, and results of operations.

Beyond tariffs, additional trade restrictions—such as limits on foreign investment and increased regulatory requirements (e.g., export licenses)—could disrupt supply chains, reduce global trade, and harm economic stability. These unpredictable actions could materially adversely affect our business, financial condition, and results of operations.

Widespread public health pandemics could materially adversely affect our business, results of operations, and financial condition.

Outbreaks of contagious diseases in countries where we, our customers, or our suppliers operate may disrupt supply chains, increase costs, and reduce demand for our products. For example, the COVID-19 pandemic caused global business disruptions, supply chain delays, and higher costs for raw materials, freight, and labor.

Pandemic-related risks include uncertain duration and severity, effectiveness of vaccines (if any), government restrictions, workplace mandates, and prolonged travel or commercial limitations. Supplier disruptions

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may lead to delays, higher costs, or the need for alternate sources, while workforce illness or quarantine could cause labor shortages. In addition, increased remote work may heighten cybersecurity risks.

The extent and duration of such disruptions cannot be predicted. Any prolonged impact could materially adversely affect our business, financial condition, and results of operations.

Product Development, Acceptance, Quality, and Regulations

If we do not continue to develop new products and bring them to market, our business, financial condition, and results of operations could be materially impacted.

Our growth and profitability depend on developing and introducing new products. While we invest in research and development and acquisitions to expand our portfolio, delays in development or unforeseen market shifts can reduce the effectiveness of these efforts or impact our profitability. New products may fail to achieve market acceptance, and timing of adoption may differ from expectations. There is also a possibility that we may miss a market opportunity because we failed to invest or invested too late in a technology, product, or enhancement sought by our customers or our markets. Significant investments in technologies, including AI, may not yield returns, and failure to adopt AI effectively in our product development process—or competitors doing so more successfully—could weaken our competitive position and our revenue and profitability.

Product development may involve design and production delays, added costs, and challenges in meeting specifications. As a motor vehicle aftermarket supplier, we face additional complexity when OEMs' parts incorporate proprietary technologies that are required to interface with other vehicle systems to work properly. Without having access to those technologies, our ability to create replacement parts may be adversely impacted.

If we cannot introduce new products or scale production as planned, or if we miss key market opportunities, our business, financial condition, and results of operations could be materially adversely affected.

We may be adversely impacted by changes in, or restrictions on access to, motor vehicle technology.

Rapid technological change in the motor vehicle aftermarket—driven by advanced electronics integration and growth in electric and fuel-cell vehicles—has increased reliance on software, firmware, and complex diagnostic tools. Restrictions on access to testing equipment, software, telematics, and repair data by OEMs or regulators could force vehicle owners to rely on dealers for service, limiting our customers’ ability to repair vehicles and our ability to design and sell new products. In addition to such restrictions and limitations, increased reliance on electronics requires significant investment in technology and exposes us to greater competition from tech-focused entrants. If we misjudge required capital or fail to deliver products that meet evolving customer needs, our competitiveness could decline, which could materially adversely affect our business, financial condition, and results of operations.

Design and quality problems with our products could damage our reputation and adversely affect our business.

Design or quality issues in our products—including reliability or compatibility problems—could harm our reputation and business. Such issues may lead to product recalls, customer loss, revenue decline, litigation, unexpected costs, and reduced market share. Although we invest in engineering, design, manufacturing, and quality systems to minimize these risks, there is no assurance we can fully prevent or resolve them. Significant design or quality problems could materially adversely affect our business, financial condition, and results of operations.

Failure to comply with safety regulations could result in enforcement actions, litigation, and costly product recalls that harm our reputation and business.

Our products and the vehicles in which they are used may be subject to safety laws and regulations worldwide. For example, the NHTSA has federal oversight over product safety issues related to automobiles in the United States, and the CPSC has federal oversight over product safety issues related to off-road vehicles. Regulatory changes may increase compliance costs or require product redesigns. Noncompliance could lead to enforcement actions, penalties, lawsuits (including potential initiation of class action lawsuits against us), and recalls that could materially adversely affect our business, financial condition, and results of operations.

Our Intellectual Property and Information Security

Cyber-attacks or other information technology security breaches could adversely impact our business and operations.

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Cyber-attacks or other information technology security breaches may cause equipment failure, disruption to our operations, or the loss or theft of sensitive data relating to our company and our employees, customers, suppliers, and business partners, including intellectual property, proprietary business information, and other sensitive material. In addition, intruders may use stolen trade secrets to develop competing or counterfeit products.

Attacks—such as malware, ransomware, and unauthorized access—are increasing in frequency and severity, and the rapid adoption of AI may heighten these risks, including through the use of deepfakes. Despite preventive measures, evolving attack techniques may outpace our defenses. Furthermore, because the techniques used to carry out cyber-attacks change frequently and in many instances are not recognized until after they are used against a target, we may be unable to anticipate these changes or implement adequate preventative measures. Responding to such incidents also could require significant costs.

In addition, we rely on third-party vendors that provide information technology services for various functions, such as human resources (e.g., payroll) and operations (e.g., logistics providers), and these vendors maintain their own information technology systems. Breaches in those systems could expose our data, intellectual property, or confidential information, disrupt operations, damage our reputation, and lead to legal claims. While we generally require these third parties to monitor and protect their information technology systems against cyber-attacks and other breaches, their efforts may not be effective.

Any substantial cyber-attack or data breach could materially adversely affect our business, financial condition, and results of operations.

We use AI technologies in our business, and that use exposes us to risk.

We continually update and expand our information technology systems to enable us to run our business more efficiently, including through the incorporation of AI solutions into our information systems, operations and processes. The increasing use and evolution of AI solutions creates potential risks for loss or misuse of Company data that forms part of any data set that was collected, used, stored, or transferred to run our business. Any unintentional dissemination or intentional destruction of confidential information stored in our or our third-party providers' systems, portable media or storage devices may result in significantly increased business and security recovery costs, damages to our reputation, or costs related to defending legal claims. In addition, if the content, analyses, or recommendations that AI programs assist in producing are or are alleged to be deficient, inaccurate, or biased, then our business, financial condition, and results of operations may be adversely affected.

We are dependent, in part, on our intellectual property. If we are not able to protect our proprietary rights or if those rights are invalidated or circumvented, our business may be adversely affected.

Our business depends on protecting our intellectual property and proprietary technologies. Among other things, we use patents, trademarks, copyrights, trade secrets, confidentiality and nondisclosure agreements, information security practices, and other measures to protect our intellectual property and proprietary technologies, but there is no assurance that we will be successful in protecting our rights or preventing misappropriation or circumvention. Protection levels vary by country, and enforcement can be uncertain and/or costly, especially in jurisdictions where intellectual property laws are weaker or where court systems to protect intellectual property rights are less developed.

Patent litigation and other challenges are expensive and unpredictable, and financial constraints may limit our ability to secure protection globally. Moreover, preventing unauthorized use or detecting theft is inherently difficult. If we fail to adequately protect our intellectual property and proprietary technology, it could materially adversely affect our ability to compete and our business, financial condition, and results of operations.

Claims of intellectual property infringement by OEMs and others could adversely affect our business and negatively impact our ability to develop new products.

We may face claims of intellectual property infringement from OEMs, competitors, non-practicing entities, or others. Such claims—whether or not they have merit—can increase legal costs, divert employee time, and delay product development or production. An adverse ruling could result in significant liability, require us to stop developing or selling affected products, and force us to license or create non-infringing alternatives. Any significant claim of intellectual property infringement or any restriction imposing an adverse ruling that limits our ability to develop and commercialize products could materially adversely affect our business, financial condition, and results of operations.

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Failure to maintain the value of our brands could have an adverse effect on our reputation, cause us to incur significant costs, and negatively impact our business.

Our brands are critical to differentiating our products and driving demand. Maintaining and enhancing brand value is essential to our success and to supporting customer marketing initiatives. A decline in brand reputation—due to product defects or quality issues, recalls, warranty claims, legal proceedings, or other matters—could harm our reputation, reduce demand, and negatively impact our business. Additionally, inadequate branding strategies following acquisitions or decisions by our customers to prioritize their private-label products over our own brands could further erode brand value. Any such decline could materially adversely affect our business, financial condition, and results of operations.

Risks Related to Our Capital Structure and Finances

If our financial performance deteriorates or economic conditions adversely change, our ability to service or refinance our indebtedness could negatively affect our financial health.

Under our credit agreement with Bank of America, N.A., as administrative agent, we borrowed $500.0 million through a term loan and maintain a $600.0 million revolving credit facility. The term loan and revolving credit facility mature on October 4, 2027. As of December 31, 2025, we had $440.6 million outstanding under the term loan, no balance under the revolving facility, and $1.1 million in letters of credit.

High levels of indebtedness may require significant cash for principal and interest payments, reducing funds for operations, acquisitions, or stock repurchases, and limiting financial flexibility. Our ability to service our indebtedness depends on future company performance and general economic conditions, many of which are beyond our control. If we are unable to generate sufficient cash flow to service our indebtedness, we may be required to, among other things: refinance or restructure all or a portion of our indebtedness; reduce or delay planned capital or operating expenditures; reduce, suspend, or eliminate our stock repurchase program; raise additional capital through sales of our securities, which may not be on favorable terms; or sell selected assets. Such measures might not be sufficient to enable us to service our indebtedness. In addition, our ability to refinance our indebtedness at or prior to maturity, and any restructuring or sale of assets that we may be required to make to service our indebtedness, might not be available on economically favorable terms or at all. Moreover, if prevailing interest rates at the time of any such refinancing or restructuring are higher than our current rates, interest expense related to such refinancing or restructuring would increase. These risks could materially adversely affect our business, financial condition, and results of operations.

Our credit agreement contains covenants that restrict our operational flexibility. If we cannot comply with these covenants, we may be in default under our credit agreement.

Our credit agreement includes covenants—such as maintaining specific financial ratios—that restrict operational flexibility and may limit activities aligned with long-term goals. Events beyond our control could affect compliance. The credit agreement is guaranteed by our material domestic subsidiaries and secured by substantially all our and their personal property and assets, subject to certain exceptions. Failure to comply with these covenants could trigger a default. A default, if not cured or waived, may permit acceleration of our indebtedness and provide our lenders with the ability to foreclose on the collateral securing their loans. If accelerated, we may lack sufficient funds to pay down the indebtedness (together with accrued interest and fees) or we may be unable to refinance on favorable terms, if at all. Such circumstances could materially adversely affect our business, financial condition, and results of operations.

We are exposed to risks related to customer-sponsored accounts receivable sales agreements.

We participate in customer-sponsored programs administered by third-party financial institutions that allow us to sell certain accounts receivable at discounted rates without recourse. These programs accelerate cash collection and reduce non-payment risk. However, the financial institutions may face financial difficulties or modify or terminate these agreements due to changes in customer credit profiles, market conditions, or other factors. Loss or modification of these arrangements could materially adversely affect our liquidity, cash flows, and financial condition. Additionally, some customers do not offer such programs, and delays or failures in collecting trade receivables from them could materially and adversely impact our business, financial condition, and results of operations.

Interest rate increases may adversely affect our financial condition and results of operations.

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Borrowings under our credit agreement are at variable interest rates, exposing us to interest rate risk. If rates rise, our debt service costs will increase even though principal remains unchanged, reducing net income and cash flow, including cash available for servicing our indebtedness. For example, a one-point increase in interest rates on outstanding borrowings under our credit agreement would have raised 2025 interest expense by approximately $4.6 million.

Our accounts receivable sales agreements also use variable rates tied to benchmarks such as the Term Secured Overnight Financing Rate ("Term SOFR"), which is a component of the discount rate applicable to each arrangement. A one-point increase in discount rates would have added approximately $11.3 million in factoring costs for 2025. Rising rates increase these costs and reduce accounts receivable collections. If these arrangements become more expensive than servicing receivables with existing debt, we may be unable to rely on them, which could materially adversely affect our business, financial condition, and results of operations.

We extend credit to our customers, some of whom may be unable to pay in the future.

We regularly extend credit to customers, and a significant portion of our accounts receivable is concentrated among a few large retailers, dealers, and distributors. As of December 31, 2025, our four largest customers represented 78% of total receivables. We monitor credit terms and limits, but customers may request increases, creating risk: granting higher limits raises exposure to non-payment, while denying requests may lead customers to shift business to competitors offering better terms. If customers fail to pay or if they redirect purchases, it could materially adversely affect our business, financial condition, and results of operations.

Our business may be negatively impacted by our dependence on foreign suppliers and by foreign currency fluctuations.

In 2025, approximately 77% of our total volume of purchases of products was sourced from non-U.S. countries, with approximately 38% sourced from China, exposing us to significant risks, including:

•uncertainty caused by import quotas, bans on importing goods or materials from certain countries or regions, or other retaliatory or punitive trade measures;

•duties, tariffs, taxes, and other charges on imports;

•restrictions on fund transfers to or from foreign countries;

•political instability, military conflict, or terrorism involving the United States or any of the countries where our products are manufactured or sold, which could cause labor shortages, a delay in transportation, or an increase in costs of transportation, labor, raw materials, or finished product or otherwise disrupt our business operations; and

•epidemics causing factory closures, labor shortages, raw material scarcity, and scrutiny and embargoing of goods produced in infected areas.

In addition, products we purchase from foreign suppliers generally are purchased through purchase orders with the purchase price specified in U.S. dollars. Accordingly, we generally do not have exposure to fluctuations in the relationship between the U.S. dollar and various foreign currencies between the time of execution of the purchase order and payment for the product. To the extent the U.S. dollar changes in value relative to those foreign currencies in the future, the prices charged by our suppliers under new purchase orders may change in equivalent U.S. dollars. For example, 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 in the future.

If these risks limit access to foreign suppliers or significantly raise costs, operations could be disrupted until alternatives are secured, which could have a material adverse effect on our business, financial condition, and results of operations.

Dorman’s Non-Executive Chairman and his family members own a significant portion of the Company.

As of February 24, 2026, Steven L. Berman, our Non-Executive Chairman, and his family beneficially owned approximately 13% of the Company’s outstanding common stock. This ownership provides them the ability to influence shareholder decisions, including Board elections and approval of significant transactions. Such

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concentration may deter or delay a change in control, limit opportunities for shareholders to receive a premium in a sale, and affect the market price of our common stock. Additionally, substantial sales of shares by Mr. Berman or his family, including shares held in family trusts and foundations—or the perception that such sales could occur—may lower the prevailing market price of our common stock.

General Risk Factors

Unfavorable economic conditions may adversely affect our business.

Adverse economic conditions—such as inflation, recession, rising fuel prices, reduced transportation capacity, higher interest rates, tariffs, labor shortages, unemployment, limited consumer credit, tax changes, or financial market instability—may reduce demand for our products, increase operating costs, or both. These conditions can also materially impact our customers, suppliers, dealers, and other parties with whom we do business. Constrained discretionary spending and lower demand for our products would negatively affect our net sales, while customer financial stress could increase doubtful accounts and write-offs. Failure to collect significant receivables could materially adversely affect our business, financial condition, and results of operations.

Our operations, revenues, and operating results, and the operations of our third-party manufacturers, suppliers, warehouse and distribution providers, and customers, may be subject to quarter-over-quarter fluctuations and disruptions from events beyond our or their control.

Our operations and those of third-party manufacturers, suppliers, logistics providers, and customers may face quarterly fluctuations and disruptions from factors beyond our control, including work stoppages, market volatility, fuel price changes, acts of war, terrorism, cyber incidents, pandemics, power outages, fires, flooding, severe weather, including hurricanes, tornadoes, and typhoons, and other natural disasters. Major disruptions could harm people or the environment, delay shipments, suspend operations, prevent timely order fulfillment, and result in penalties or lost sales—any of which could materially adversely affect our business, financial condition, and results of operations.

We rely heavily on computer systems to manage inventory, process transactions, and deliver products. These systems are vulnerable to power outages, telecom failures, viruses, cyber-attacks, and other catastrophic events. Damage or failure could lead to data loss, inventory management issues, transaction delays, and reduced sales, which could materially adversely impact our business, financial condition, and results of operations.

Unfavorable results of legal proceedings could materially adversely affect us.

We face legal proceedings and claims arising from normal business activities, including contracts, employment, competition, and intellectual property. In addition, if our products are defective or installed or used incorrectly by customers, bodily injury, property damage, or other injury, including death, may result and could give rise to product liability claims against us. Such matters can be costly, time-consuming, and distracting, regardless of merit or insurance coverage. They also may divert management’s attention and other resources, limit sales, result in adverse judgments, penalties, or fines, and harm our reputation, business, financial condition, and results of operations. There can be no assurance regarding the outcome of current or future legal proceedings, claims, or investigations.

The market price of our common stock may be volatile and could expose us to securities class action litigation and increased shareholder activism.

The price of our common stock may fluctuate significantly due to economic conditions, market volatility, and our ability to meet analysts’ expectations. Even minor shortfalls in our performance can negatively impact our stock price. Broader market downturns or volatility unrelated to our performance may also cause declines. Such volatility may lead to securities class action litigation, which could impose substantial costs and divert management’s attention, adversely affecting our business and results. Additionally, volatility may attract shareholder activism, including proxy contests or public campaigns, which could increase costs, strain relationships with suppliers, customers, and regulators, and negatively impact our stock price.

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.

Our success depends on retaining executive officers and other highly skilled employees and attracting new talent. Losing key personnel or failing to hire qualified staff could harm our business. Although we periodically conduct compensation benchmarking and surveys, competition for talent is intense, and rising labor demand may increase costs and challenge our ability to maintain a competitive compensation structure. If we cannot retain or

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recruit essential personnel or manage compensation effectively, our business, financial condition, and results of operations could be materially adversely affected.

Our growth may be impacted by acquisitions. We may not be able to identify suitable acquisition candidates, complete acquisitions, or integrate acquisitions successfully.

Our growth depends in part on acquiring and integrating new businesses, which carries significant risks. We may be unable to identify suitable targets, negotiate favorable terms, secure financing, complete transactions, or achieve expected revenue and profitability. Additionally, we risk spending time and money investigating and negotiating with potential acquisition partners, but not completing transactions. These could make it more difficult for us to diversify our businesses and to penetrate or expand important product offerings, geographies, or markets. In addition, integration challenges, operational disruptions, the presence or absence of adequate internal controls and/or significant fraud in the financial systems of acquired companies, and management distraction could occur, and we may not fully assess all risks inherent in the acquisition and integration process. Lastly, the value of goodwill and other intangible assets acquired could be impacted by one or more continuing unfavorable events and/or trends, which could result in significant impairment charges. Any difficulties with completing and integrating acquisitions could materially and adversely affect our business, financial condition, and results of operations.

Changes in tax laws or exposure to additional income tax liabilities could have a material adverse effect on our business, financial condition, and results of operations.

We are subject to federal, state, and local income and non-income taxes and face audits in multiple jurisdictions. Tax authorities may challenge our positions and assess additional taxes. While we evaluate audit outcomes to set tax provisions, actual results may differ and could materially affect our business and financial condition. Changes in tax laws or rulings could also significantly impact our effective tax rate.

Global climate change and related regulations could negatively affect our business.

Climate change poses financial and operational risks to our business. Extreme weather events and other potential impacts of climate change, including, but not limited to hail, floods, rising sea levels, droughts, wild fires, tornadoes, and tropical cyclones, can reduce product demand, disrupt product availability or distribution center operations, raise insurance and operating costs, disrupt ports and logistics networks, and increase supply chain expenses. Reduced product availability and demand can lead to reduced revenue, and increased costs can adversely affect our profitability. In addition, growing global focus on greenhouse gas emissions may lead to new laws and regulations that require significant compliance efforts and capital expenditures. For example, restrictions or standards adopted regarding emissions of carbon dioxide by motor vehicles or fuels could adversely affect demand for motor vehicles, annual miles driven, or the products we sell. Moreover, such restrictions and standards could lead to or require changes in motor vehicle technology and increased product development costs. While we strive to meet evolving standards, we cannot guarantee success, market acceptance of our products, or favorable returns on related investments.

We could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act and similar anti-bribery and anti-corruption laws around the world.

The U.S. Foreign Corrupt Practices Act (the "FCPA") and similar international laws prohibit improper payments to government officials and, in some circumstances, non-government officials, to obtain or retain business. Enforcement has intensified globally, with more frequent investigations and severe penalties. While we mandate that our employees, agents, and suppliers comply with anti-bribery and anticorruption (“ABAC”) laws, operating in regions with corruption risks exposes us to potential violations. We cannot assure you that our internal control policies and procedures will always protect us from reckless or criminal acts committed by our employees or third-party intermediaries. If we believe or have reason to believe that our employees, agents, or suppliers have or may have violated applicable ABAC laws, or if we are subject to allegations of any such violations, we may be required to investigate or have outside counsel investigate the relevant facts and circumstances. In addition to potentially costly investigations, allegations or violations could lead to criminal or civil sanctions, business disruption, reputational harm, and loss of customers. These impacts could materially affect our reputation, business, financial condition, and results of operations.

Our products are subject to import and export controls and economic sanctions laws and regulations in various jurisdictions, and violations could adversely affect us.

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Import and export controls and economic sanctions laws and regulations include restrictions and prohibitions on the sale or supply of certain products and on our transfer of parts, components, and related technical information and know-how to certain countries, regions, governments, persons, and entities. Various countries regulate the importation of certain products through import permitting and licensing requirements and have enacted laws that could limit our ability to distribute our products. The exportation, re-exportation, transfers within foreign countries, and importation of our products, including by our suppliers and vendors, must comply with these laws and regulations, and any violations may result in reputational harm, government investigations and penalties, and denial or curtailment of importing or exporting activities. Complying with export control and sanctions laws for a particular sale may be time-consuming, may increase our costs, and may result in the delay or loss of sales opportunities. Violations may lead to investigations, fines, penalties, reputational harm, and limits on trade. Changes in these laws could require additional authorizations, product modifications, or block exports or imports, adversely affecting our business, financial condition, and results.