As we come to close of the second quarter of our fiscal year, it is time to look back at our results. In the first quarter we struggled and met only 96 percent of our Annual Sales Plan (ASP). However in the second quarter, we have made up significant ground to pull within 2 percentage points of our targeted goals for the first half of the year, provided we close out September at plan. If this occurs, it will be the first time since 2013 that we have met our sales plan for three consecutive months. We are presently running 7 percent ahead of last year’s results, outpacing market growth by more than 4 percent. We have seen strong sales efforts from our MovinCool, Robotics, HD OEM, National Accounts Retail and Traditional Aftermarket teams, which has allowed them to meet their ASP targets through August. This strong sales performance comeback could not have been accomplished without the great assistance of each and every associate here at DPAM. On behalf of the Sales organization, I offer our thanks to the entire DPAM team for your efforts. They have allowed us to reach our recent revenue and financial goals.
I would like to bring you up to speed on the changes occurring in one of the markets we serve.
In the automotive aftermarket, we have seen continued consolidation of distributors and alignment of our Buying Groups with each other and Global Trading Groups. One of the most interesting changes is being driven by Carl Icahn, who, as his name suggests, is an icon in the investment community. In the past few months we have seen the emergence of a vertically integrated major account being formed by his Icahn Enterprises Holdings (IEH) Auto Parts LLC and Icahn Enterprises LP.
IEH Auto Parts, formerly known as Uni-Select USA Inc., has recently acquired Pep Boys, Automotive Electrical Distributors Inc., Hillsborough Auto Parts Inc. and Leicester Auto Parts. These actions give IEH a nationwide distribution footprint. IEH’s sister company, Icahn Enterprises LP, is in the process of acquiring 100 percent of Federal-Mogul Holdings Corp., a DPAM competitor in the spark plug (Champion) and wiper blade (ANCO) areas. These actions open marketplace opportunities for DPAM. We have never sold directly to Pep Boys due to their financial situation, but now we have opportunities. We also have major distribution channels looking for alternatives to Federal-Mogul product lines due to this vertical action. We must look at these changes in the marketplace as opportunities and be prepared to realize the potential for DPAM. We need a collaborative team to seize these opportunities as they present themselves in the market.
“All for One and One for All”
It has been nearly a year since Mr. Kato gave us this motto to assist us in our daily endeavors. If we reflect on the ways that we had been operating prior to his taking the helm, the need for change was apparent. We were not acting interdependently to achieve our goals. In many cases, we were at odds with each other. I am happy to see us moving in the direction of greater collaboration. We must keep this in the forefront of our thoughts at all times since it is easy to fall back into our old ways.
Thank you once again for your continued efforts. Let’s all be Musketeers!