-- Record Sales for Quarter and Nine
Months --
Motorcar Parts of America, Inc. (
Nasdaq: MPAA)
today announced results for its fiscal 2019 third quarter ended
December 31, 2018 – reflecting record sales for both the quarter
and nine months on a reported and adjusted basis, and investments
to support new business, product line expansion, and continued
growth.
Net sales for the fiscal 2019 third quarter increased 20.6
percent to $124.1 million from $102.9 million for the same period a
year earlier, predominantly as a result of increases in the
company’s rotating electrical business.
Adjusted net sales for the fiscal 2019 third quarter increased
14.4 percent to $119.6 million from $104.5 million a year
earlier.
“The company is at an important inflection point in its
multi-year strategy to expand market share within existing and new
product categories. We are encouraged by our growth and the
progress we are making with our new product lines, as well as the
build-out and ramp-up of our existing and expanding facilities,”
said Selwyn Joffe, chairman, president and chief executive
officer.
Net loss for the fiscal 2019 third quarter was $3.1 million, or
$0.16 per share – reflecting the impact of the items listed below
compared with net loss of $2.5 million, or $0.13 per share, a year
ago.
Adjusted net income for the fiscal 2019 third quarter was $6.7
million, or $0.35 per diluted share, compared with $7.9 million, or
$0.41 per diluted share, a year earlier.
The results for the quarter and gross margin were primarily
impacted by five items totaling $9.7 million.
- Customer allowances and stock adjustment costs of $2.7 million
related to new business and product line expansion, including
up-front costs and core buy back premium amortization expense.
- Core sales of $7,753,000, less related cost of goods sold of
$7,750,000, and a fixed cost of $767,000 in connection with the
cancellation of a customer contract.
- A non-cash write-down of $2.6 million associated with the
quarterly revaluation for cores on customers' shelves. (This does
not affect the reimbursable amount for the full value of cores on
the customers’ shelves should business with the customer be
discontinued.)
- Net tariff costs of $1.5 million paid for products sold before
price increases were effective.
- Transition costs of $2.1 million associated with the expansion
of manufacturing and distribution capacity to support increased
demand for products, including new brake product lines.
Gross profit for the fiscal 2019 third quarter was $21.2 million
compared with $26.1 million a year earlier. Gross profit as a
percentage of net sales for the fiscal 2019 third quarter was 17.0
percent compared with 25.3 percent a year earlier.
Adjusted gross profit for the fiscal 2019 third quarter was
$30.9 million compared with $30.7 million a year ago.
Adjusted gross profit as a percentage of adjusted net sales for the
three months was 25.8 percent compared with 29.4 percent a year
earlier.
Adjusted gross margin for the quarter was impacted by several
factors -- including higher freight and wage costs, higher returns,
the introduction of electric vehicle test systems, overtime and
other costs related to the increase in new business, and other
strategic initiatives for long-term growth.
“Other than the wage inflation and higher freight costs, these
margin headwinds are expected to reverse in the next fiscal
year. With respect to off-shore wage inflation, we are
evaluating alternative operating efficiencies and pricing
strategies,” Joffe said.
Nine-Month Results
Net sales for the fiscal 2019 nine-month period increased 11.7
percent to $343.7 million from $307.8 million a year earlier.
Adjusted net sales for the fiscal 2019 nine-month period
increased 9.5 percent to $343.6 million from $313.7 million last
year.
Net loss for the fiscal 2019 nine-month period was $5.1 million,
or $0.27 per share, compared with net income of $10.9 million, or
$0.56 per diluted share, in fiscal 2018.
Adjusted net income for the fiscal 2019 nine-month period was
$21.2 million, or $1.10 per diluted share, compared with $26.5
million, or $1.37 per diluted share, in fiscal 2018.
Gross profit for the fiscal 2019 nine-month period was $63.2
million compared with $77.9 million a year earlier. Gross
profit as a percentage of net sales for the fiscal 2019 nine-month
period was 18.4 percent compared with 25.3 percent a year
earlier.
Adjusted gross profit for the fiscal 2019 nine-month period was
$89.8 million compared with $90.8 million a year ago.
Adjusted gross profit as a percentage of adjusted
net sales for the nine months was 26.1 percent compared with
28.9 percent a year earlier.
Revenue Recognition
Effective April 1, 2018, the company adopted Accounting
Standards Codification Topic 606, Revenue from Contracts with
Customers, ("ASC 606") using the full retrospective transition
method. As a result, the prior year three and nine months ended
December 31, 2017 were revised to reflect the adoption of the new
revenue recognition accounting standards. The effects of the
adoption were an increase to previously reported revenues for the
three and nine months ended December 31, 2017 of $1,165,000 and
$1,029,000, respectively. The revenue changes were accompanied by
related changes to cost of goods sold – an increase to previously
reported cost of goods sold for the three and nine months ended
December 31, 2017 of $984,000 and $225,000, respectively.
Also, as a result of the adoption of ASC 606 and the resultant
changes in company policy, the effect on the consolidated balance
sheets was to create contract asset and contract liability accounts
to document those balance sheet items being impacted by the new
revenue recognition requirements. Additional information will
be available in the company’s Form 10-Q filing later
today.
Use of Non-GAAP Measures
This press release includes the following non-GAAP measures -
adjusted net sales, adjusted net income (loss), adjusted EBITDA,
adjusted gross profit and adjusted gross margin, which are not
measures of financial performance under GAAP, and should not be
considered as alternatives to net sales, net income (loss), EBITDA,
income from operations, gross profit or gross profit margin as a
measure of financial performance. The Company believes these
non-GAAP measures, when considered together with the corresponding
GAAP measures, provide useful information to investors and
management regarding financial and business trends relating to the
company’s results of operations. However, these non-GAAP
measures have significant limitations in that they do not reflect
all of the costs associated with the operations of the company’s
business as determined in accordance with GAAP. Therefore,
investors should consider non-GAAP measures in addition to, and not
as a substitute for, or superior to, measures of financial
performance in accordance with GAAP. For a reconciliation of
adjusted net sales, adjusted net income (loss), adjusted EBITDA,
adjusted gross profit and adjusted gross margin to their
corresponding GAAP measures, see the financial tables included in
this press release. Also, refer to our Form 8-K to which this
release is attached, and other filings we make with the SEC, for
further information regarding these adjustments.
Teleconference and Web Cast
Selwyn Joffe, chairman, president and chief executive officer,
and David Lee, chief financial officer, will host an investor
conference call today at 10:00 a.m. Pacific time to discuss the
company’s financial results and operations.
The call will be open to all interested investors either through
a live audio Web broadcast at www.motorcarparts.com or live by
calling (877)-776-4016 (domestic) or (973)-638-3231
(international). For those who are not available to listen to
the live broadcast, the call will be archived for seven days on
Motorcar Parts of America’s website www.motorcarparts.com. A
telephone playback of the conference call will also be available
from approximately 1:00 p.m. Pacific time on February 11, 2019
through 8:59 p.m. Pacific time on February 18, 2019 by calling
(855)-859-2056 (domestic) or (404)-537-3406 (international) and
using access code: 6949168.
About Motorcar Parts of America, Inc.
Motorcar Parts of America, Inc. is a
remanufacturer, manufacturer and distributor of automotive
aftermarket parts -- including alternators, starters, wheel bearing
and hub assemblies, brake master cylinders, brake power boosters,
rotors, brake pads and turbochargers utilized in imported and
domestic passenger vehicles, light trucks and heavy-duty
applications. Motorcar Parts of America’s products are sold
to automotive retail outlets and the professional repair market
throughout the United States and Canada, with facilities located in
California, Mexico, Malaysia, China and India, and administrative
offices located in California, Tennessee, Mexico, Singapore,
Malaysia and Canada. In addition, the company develops,
designs and manufactures testing solutions for performance,
endurance and production testing of alternators, starters, electric
motors, batteries, inverters and belt starter generators for both
the OE and aftermarket. Additional information is available at
www.motorcarparts.com.
The Private Securities Litigation Reform Act of 1995 provides a
“safe harbor” for certain forward-looking statements. The
statements contained in this press release that are not historical
facts are forward-looking statements based on the company’s current
expectations and beliefs concerning future developments and their
potential effects on the company. These forward-looking statements
involve significant risks and uncertainties (some of which are
beyond the control of the company) and are subject to change based
upon various factors. Reference is also made to the Risk
Factors set forth in the company’s Form 10-K Annual Report filed
with the Securities and Exchange Commission (SEC) in June 2018 and
in its Forms 10-Q filed with the SEC for additional risks and
uncertainties facing the company. The company undertakes no
obligation to publicly update or revise any forward-looking
statements, whether as the result of new information, future events
or otherwise.
(Financial tables follow)
MOTORCAR PARTS OF AMERICA, INC. AND
SUBSIDIARIESConsolidated Statements of
Income(Unaudited)
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
December 31, |
|
December 31, |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(As Adjusted) |
|
|
|
(As Adjusted) |
Net sales |
|
$ |
124,113,000 |
|
|
$ |
102,878,000 |
|
|
$ |
343,720,000 |
|
|
$ |
307,834,000 |
Cost of goods sold |
|
|
102,952,000 |
|
|
|
76,817,000 |
|
|
|
280,496,000 |
|
|
|
229,894,000 |
Gross
profit |
|
|
21,161,000 |
|
|
|
26,061,000 |
|
|
|
63,224,000 |
|
|
|
77,940,000 |
Operating
expenses: |
|
|
|
|
|
|
|
|
General
and administrative |
|
|
12,331,000 |
|
|
|
11,915,000 |
|
|
|
33,419,000 |
|
|
|
26,418,000 |
Sales and
marketing |
|
|
5,149,000 |
|
|
|
4,048,000 |
|
|
|
14,078,000 |
|
|
|
10,899,000 |
Research
and development |
|
|
2,054,000 |
|
|
|
1,678,000 |
|
|
|
5,574,000 |
|
|
|
3,920,000 |
Total
operating expenses |
|
|
19,534,000 |
|
|
|
17,641,000 |
|
|
|
53,071,000 |
|
|
|
41,237,000 |
Operating income |
|
|
1,627,000 |
|
|
|
8,420,000 |
|
|
|
10,153,000 |
|
|
|
36,703,000 |
Interest
expense, net |
|
|
5,764,000 |
|
|
|
3,953,000 |
|
|
|
16,538,000 |
|
|
|
10,789,000 |
(Loss) income before
income tax (benefit) expense |
|
|
(4,137,000 |
) |
|
|
4,467,000 |
|
|
|
(6,385,000 |
) |
|
|
25,914,000 |
Income tax (benefit)
expense |
|
|
(1,035,000 |
) |
|
|
6,994,000 |
|
|
|
(1,301,000 |
) |
|
|
15,026,000 |
|
|
|
|
|
|
|
|
|
Net (loss) income |
|
$ |
(3,102,000 |
) |
|
$ |
(2,527,000 |
) |
|
$ |
(5,084,000 |
) |
|
$ |
10,888,000 |
Basic net
(loss) income per share |
|
$ |
(0.16 |
) |
|
$ |
(0.13 |
) |
|
$ |
(0.27 |
) |
|
$ |
0.58 |
Diluted net (loss) income per share |
$ |
(0.16 |
) |
|
$ |
(0.13 |
) |
|
$ |
(0.27 |
) |
|
$ |
0.56 |
Weighted
average number of shares outstanding: |
|
|
|
|
|
|
|
Basic |
|
|
18,810,702 |
|
|
|
19,069,152 |
|
|
|
18,861,617 |
|
|
|
18,814,967 |
Diluted |
|
|
18,810,702 |
|
|
|
19,069,152 |
|
|
|
18,861,617 |
|
|
|
19,400,744 |
|
|
|
|
|
|
|
|
|
Note: Prior year three and nine months ended December 31, 2017
results reflect the adoption of the new revenue recognition
accounting standards. Effective April 1, 2018, the Company
adopted Accounting Standards Codification Topic 606, Revenue from
Contracts with Customers ("ASC 606") using the full retrospective
transition method. Additionally, the Company has revised its
financial statements for each of the three years in the period
ended March 31, 2018 and for the three months ended June 30,
2018. As of June 30, 2018, the cumulative error for all
periods previously reported was an understatement of net income of
$2,938,000. For further information, please see the Company's
September 30, 2018 Form 10-Q.
MOTORCAR PARTS OF AMERICA, INC. AND
SUBSIDIARIESConsolidated Balance
Sheets
|
|
December 31, 2018 |
|
March 31, 2018 |
ASSETS |
|
(Unaudited) |
(As Adjusted) |
Current assets: |
|
|
|
|
Cash and cash
equivalents |
|
$ |
8,591,000 |
|
|
$ |
13,049,000 |
|
Short-term investments |
|
|
2,868,000 |
|
|
|
2,828,000 |
|
Accounts
receivable — net |
|
|
54,761,000 |
|
|
|
63,174,000 |
|
Inventory— net |
|
|
205,075,000 |
|
|
|
161,210,000 |
|
Inventory
unreturned |
|
|
10,746,000 |
|
|
|
7,508,000 |
|
Contract
assets |
|
|
26,965,000 |
|
|
|
23,206,000 |
|
Income
tax receivable |
|
|
12,887,000 |
|
|
|
7,972,000 |
|
Prepaid
expenses and other current assets |
|
|
7,946,000 |
|
|
|
8,608,000 |
|
Total
current assets |
|
|
329,839,000 |
|
|
|
287,555,000 |
|
Plant and
equipment — net |
|
|
32,349,000 |
|
|
|
28,322,000 |
|
Long-term
deferred income taxes |
|
|
7,607,000 |
|
|
|
6,698,000 |
|
Long-term
contract assets |
|
|
222,999,000 |
|
|
|
222,731,000 |
|
Goodwill |
|
|
3,402,000 |
|
|
|
2,551,000 |
|
Intangible assets — net |
|
|
8,762,000 |
|
|
|
3,766,000 |
|
Other
assets |
|
|
891,000 |
|
|
|
804,000 |
|
TOTAL
ASSETS |
|
$ |
605,849,000 |
|
|
$ |
552,427,000 |
|
LIABILITIES AND
SHAREHOLDERS' EQUITY |
|
|
|
Current
liabilities: |
|
|
|
Accounts
payable |
|
$ |
101,730,000 |
|
|
$ |
73,273,000 |
|
Accrued
liabilities |
|
|
13,382,000 |
|
|
|
12,048,000 |
|
Customer
finished goods returns accrual |
|
|
19,236,000 |
|
|
|
17,805,000 |
|
Contract
liabilities |
|
|
29,239,000 |
|
|
|
32,603,000 |
|
Revolving
loan |
|
|
78,406,000 |
|
|
|
54,000,000 |
|
Other
current liabilities |
|
|
5,019,000 |
|
|
|
4,471,000 |
|
Current
portion of term loan |
|
|
3,685,000 |
|
|
|
3,068,000 |
|
Total
current liabilities |
|
|
250,697,000 |
|
|
|
197,268,000 |
|
Term
loan, less current portion |
|
|
25,109,000 |
|
|
|
13,913,000 |
|
Long-term
contract liabilities |
|
|
42,527,000 |
|
|
|
48,183,000 |
|
Long-term
deferred income taxes |
|
|
234,000 |
|
|
|
226,000 |
|
Other
liabilities |
|
|
7,494,000 |
|
|
|
5,957,000 |
|
Total
liabilities |
|
|
326,061,000 |
|
|
|
265,547,000 |
|
Commitments and contingencies |
|
|
|
Shareholders' equity: |
|
|
|
Preferred
stock; par value $.01 per share, 5,000,000 shares authorized; none
issued |
|
|
- |
|
|
|
- |
|
Series A
junior participating preferred stock; par value $.01 per
share, |
|
|
|
20,000 shares authorized; none issued |
|
|
- |
|
|
|
- |
|
Common
stock; par value $.01 per share, 50,000,000 shares authorized; |
|
|
|
18,812,102 and 18,893,102 shares issued and
outstanding at December 31, 2018 and |
March 31, 2018, respectively |
|
|
188,000 |
|
|
|
189,000 |
|
Additional paid-in capital |
|
|
212,621,000 |
|
|
|
213,609,000 |
|
Retained
earnings |
|
|
74,172,000 |
|
|
|
78,510,000 |
|
Accumulated other comprehensive loss |
|
|
(7,193,000 |
) |
|
|
(5,428,000 |
) |
Total
shareholders' equity |
|
|
279,788,000 |
|
|
|
286,880,000 |
|
TOTAL
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
$ |
605,849,000 |
|
|
$ |
552,427,000 |
|
Reconciliation of Non-GAAP Financial
Measures
To supplement the consolidated financial statements presented in
accordance with U.S. generally accepted accounting principles
("GAAP"), the Company has included the following non-GAAP adjusted
financial measures in this press release and in the webcast to
discuss the Company's financial results for the three and nine
months ended December 31, 2018 and 2017. Each of these non-GAAP
adjusted financial measures is adjusted from results based on GAAP
to exclude certain expenses and gains. Among other things,
the Company uses such non-GAAP adjusted financial measures in
addition to and in conjunction with corresponding GAAP measures to
help analyze the performance of its business.
These non-GAAP adjusted financial measures reflect an additional
way of viewing aspects of the Company's operations that, when
viewed with the GAAP results and the reconciliations to
corresponding GAAP financial measures, provide a more complete
understanding of the Company's results of operations and the
factors and trends affecting the Company's business. However,
these non-GAAP adjusted financial measures should be considered as
a supplement to, and not as a substitute for, or superior to, the
corresponding measures calculated in accordance with GAAP.
Income statement information for the three and nine months ended
December 31, 2018 and 2017 are as follows:
Reconciliation
of Non-GAAP Financial Measures |
|
|
Exhibit 1 |
|
|
|
|
|
Three Months Ended December 31, |
|
Nine Months Ended December 31, |
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
GAAP Results: |
|
|
(As Adjusted) |
|
|
|
(As Adjusted) |
Net
sales |
$ |
124,113,000 |
|
|
$ |
102,878,000 |
|
|
$ |
343,720,000 |
|
|
$ |
307,834,000 |
|
Net
(loss) income |
|
(3,102,000 |
) |
|
|
(2,527,000 |
) |
|
|
(5,084,000 |
) |
|
|
10,888,000 |
|
(Loss)
income per share (EPS) |
|
(0.16 |
) |
|
|
(0.13 |
) |
|
|
(0.27 |
) |
|
|
0.56 |
|
Gross
margin |
|
17.0 |
% |
|
|
25.3 |
% |
|
|
18.4 |
% |
|
|
25.3 |
% |
Non-GAAP Adjusted
Results: |
|
|
|
|
|
|
|
Non-GAAP
adjusted net sales |
$ |
119,630,000 |
|
|
$ |
104,534,000 |
|
|
$ |
343,592,000 |
|
|
$ |
313,731,000 |
|
Non-GAAP
adjusted net income |
|
6,683,000 |
|
|
|
7,945,000 |
|
|
|
21,240,000 |
|
|
|
26,548,000 |
|
Non-GAAP
adjusted diluted earnings per share (EPS) |
|
0.35 |
|
|
|
0.41 |
|
|
|
1.10 |
|
|
|
1.37 |
|
Non-GAAP
adjusted gross margin |
|
25.8 |
% |
|
|
29.4 |
% |
|
|
26.1 |
% |
|
|
28.9 |
% |
Non-GAAP
adjusted EBITDA |
$ |
16,190,000 |
|
|
$ |
17,209,000 |
|
|
$ |
48,961,000 |
|
|
$ |
55,039,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Prior year three and nine months ended December 31, 2017
results reflect the adoption of the new revenue recognition
accounting standards. Effective April 1, 2018, the Company
adopted Accounting Standards Codification Topic 606, Revenue from
Contracts with Customers ("ASC 606") using the full retrospective
transition method. Additionally, the Company has revised its
financial statements for each of the three years in the period
ended March 31, 2018 and for the three months ended June 30,
2018. As of June 30, 2018, the cumulative error for all
periods previously reported was an understatement of net income of
$2,938,000. For further information, please see the Company's
September 30, 2018 Form 10-Q. As of June 30, 2018, the
cumulative impact to non-GAAP adjusted net income for all periods
previously reported was an understatement of $1,220,000.
Reconciliation of Non-GAAP Financial
Measures |
|
|
Exhibit 2 |
|
|
|
|
|
|
Three Months Ended December 31, |
|
Nine Months Ended December 31, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
|
(As Adjusted) |
|
|
|
(As Adjusted) |
GAAP net
sales |
$ |
124,113,000 |
|
|
$ |
102,878,000 |
|
$ |
343,720,000 |
|
|
$ |
307,834,000 |
Adjustments: |
|
|
|
|
|
|
|
|
Net sales |
|
|
|
|
|
|
|
|
Return
and stock adjustment accruals related to new business and product
line expansion |
|
673,000 |
|
|
|
- |
|
|
673,000 |
|
|
|
2,496,000 |
|
Customer
allowances related to new business |
|
2,139,000 |
|
|
|
1,656,000 |
|
|
6,494,000 |
|
|
|
3,401,000 |
|
Impact of
sales price increases related to tariffs |
|
(309,000 |
) |
|
|
- |
|
|
(309,000 |
) |
|
|
- |
|
Core
sales and a fixed cost in connection with a cancelled contract |
|
(6,986,000 |
) |
|
|
- |
|
|
(6,986,000 |
) |
|
|
- |
Adjusted
net sales |
$ |
119,630,000 |
|
|
$ |
104,534,000 |
|
$ |
343,592,000 |
|
|
$ |
313,731,000 |
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP Financial Measures |
Exhibit 3 |
|
|
|
|
Three Months Ended December
31, |
|
|
2018 |
|
2017 |
|
|
|
|
|
|
(As Adjusted) |
|
|
$ |
|
Per Diluted Share |
|
$ |
|
Per Diluted Share |
GAAP net
(loss) income |
$ |
(3,102,000 |
) |
|
$ |
(0.16 |
) |
|
$ |
(2,527,000 |
) |
|
$ |
(0.13 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
Net sales |
|
|
|
|
|
|
|
|
Return and stock
adjustment accruals related to new business and product line
expansion |
|
673,000 |
|
|
$ |
0.04 |
|
|
|
- |
|
|
$ |
- |
|
|
Customer
allowances related to new business |
|
2,139,000 |
|
|
$ |
0.11 |
|
|
|
1,656,000 |
|
|
$ |
0.09 |
|
|
Impact of
sales price increases related to tariffs |
|
(309,000 |
) |
|
$ |
(0.02 |
) |
|
|
- |
|
|
$ |
- |
|
|
Core
sales and a fixed cost in connection with a cancelled contract |
|
(6,986,000 |
) |
|
$ |
(0.36 |
) |
|
|
- |
|
|
$ |
- |
|
|
Cost of goods sold |
|
|
|
|
|
|
|
|
New
product line start-up and ramp-up costs, and transition
expenses |
|
2,078,000 |
|
|
$ |
0.11 |
|
|
|
803,000 |
|
|
$ |
0.04 |
|
|
Revaluation - cores on customers' shelves and inventory step-up
amortization |
|
2,619,000 |
|
|
$ |
0.14 |
|
|
|
2,227,000 |
|
|
$ |
0.11 |
|
|
Cost of
customer allowances and stock adjustment accruals related to new
business and product line expansion |
|
(51,000 |
) |
|
$ |
(0.00 |
) |
|
|
- |
|
|
$ |
- |
|
|
Tariff
costs paid for products sold before price increases were
effective |
|
1,835,000 |
|
|
$ |
0.10 |
|
|
|
- |
|
|
$ |
- |
|
|
Cost of
goods sold for cores recorded in connection with a cancelled
contract |
|
7,750,000 |
|
|
$ |
0.40 |
|
|
|
- |
|
|
$ |
- |
|
|
Operating expenses |
|
|
|
|
|
|
|
|
Acquisition, financing, transition, severance, new business and
other costs |
|
1,410,000 |
|
|
$ |
0.07 |
|
|
|
236,000 |
|
|
$ |
0.01 |
|
|
Share-based compensation expenses |
|
1,030,000 |
|
|
$ |
0.05 |
|
|
|
914,000 |
|
|
$ |
0.05 |
|
|
Mark-to-market losses (gains) |
|
860,000 |
|
|
$ |
0.04 |
|
|
|
1,784,000 |
|
|
$ |
0.09 |
|
|
Interest |
|
|
|
|
|
|
|
|
Write-off
of debt issuance costs |
|
- |
|
|
$ |
- |
|
|
|
231,000 |
|
|
$ |
0.01 |
|
|
Tax effected (a) |
|
(3,263,000 |
) |
|
$ |
(0.17 |
) |
|
|
(2,199,000 |
) |
|
$ |
(0.11 |
) |
|
Tax charge for
revaluation of deferred tax assets and liabilities |
|
- |
|
|
$ |
- |
|
|
|
4,275,000 |
|
|
$ |
0.22 |
|
|
Transition tax on
deemed repatriation of accumulated foreign income |
|
- |
|
|
$ |
- |
|
|
|
545,000 |
|
|
$ |
0.03 |
|
Adjusted
net income |
$ |
6,683,000 |
|
|
$ |
0.35 |
|
|
$ |
7,945,000 |
|
|
$ |
0.41 |
|
|
|
|
|
|
|
|
|
|
(a)
Adjusted net income is calculated by applying an income tax rate of
25.0% for the three months ended December 31, 2018 and 35.5% for
the three months |
ended
December 31, 2017; this rate may differ from the period's actual
income tax rate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP Financial Measures |
Exhibit 4 |
|
|
|
|
Nine Months Ended December
31, |
|
|
2018 |
|
2017 |
|
|
|
|
|
|
(As Adjusted) |
|
|
$ |
|
Per Diluted Share |
|
$ |
|
Per Diluted Share |
GAAP net
(loss) income |
$ |
(5,084,000 |
) |
|
$ |
(0.27 |
) |
|
$ |
10,888,000 |
|
|
$ |
0.56 |
|
Adjustments: |
|
|
|
|
|
|
|
|
Net sales |
|
|
|
|
|
|
|
|
Return and stock
adjustment accruals related to new business and product line
expansion |
|
673,000 |
|
|
$ |
0.03 |
|
|
|
2,496,000 |
|
|
$ |
0.13 |
|
|
Customer
allowances related to new business |
|
6,494,000 |
|
|
$ |
0.34 |
|
|
|
3,401,000 |
|
|
$ |
0.18 |
|
|
Impact of
sales price increases related to tariffs |
|
(309,000 |
) |
|
$ |
(0.02 |
) |
|
|
- |
|
|
$ |
- |
|
|
Core
sales and a fixed cost in connection with a cancelled contract |
|
(6,986,000 |
) |
|
$ |
(0.36 |
) |
|
|
- |
|
|
$ |
- |
|
|
Cost of goods sold |
|
|
|
|
|
|
|
|
New
product line start-up and ramp-up costs, and transition
expenses |
|
5,666,000 |
|
|
$ |
0.29 |
|
|
|
803,000 |
|
|
$ |
0.04 |
|
|
Revaluation - cores on customers' shelves and inventory step-up
amortization |
|
11,466,000 |
|
|
$ |
0.60 |
|
|
|
6,532,000 |
|
|
$ |
0.34 |
|
|
Cost of
customer allowances and stock adjustment accruals related to new
business and product line expansion |
|
(51,000 |
) |
|
$ |
(0.00 |
) |
|
|
(362,000 |
) |
|
$ |
(0.02 |
) |
|
Tariff
costs paid for products sold before price increases were
effective |
|
1,835,000 |
|
|
$ |
0.10 |
|
|
|
- |
|
|
$ |
- |
|
|
Cost of
goods sold for cores recorded in connection with a cancelled
contract |
|
7,750,000 |
|
|
$ |
0.40 |
|
|
|
- |
|
|
$ |
- |
|
|
Operating expenses |
|
|
|
|
|
|
|
|
Acquisition, financing, transition, severance, new business and
other costs |
|
3,085,000 |
|
|
$ |
0.16 |
|
|
|
737,000 |
|
|
$ |
0.04 |
|
|
Share-based compensation expenses |
|
3,151,000 |
|
|
$ |
0.16 |
|
|
|
2,658,000 |
|
|
$ |
0.14 |
|
|
Mark-to-market losses (gains) |
|
1,628,000 |
|
|
$ |
0.08 |
|
|
|
(1,251,000 |
) |
|
$ |
(0.06 |
) |
|
Interest |
|
|
|
|
|
|
|
|
Write-off
of debt issuance costs |
|
303,000 |
|
|
$ |
0.02 |
|
|
|
231,000 |
|
|
$ |
0.01 |
|
|
Tax effected (a) |
|
(8,381,000 |
) |
|
$ |
(0.44 |
) |
|
|
(4,405,000 |
) |
|
$ |
(0.23 |
) |
|
Tax charge for
revaluation of deferred tax assets and liabilities |
|
- |
|
|
$ |
- |
|
|
|
4,275,000 |
|
|
$ |
0.22 |
|
|
Transition tax on
deemed repatriation of accumulated foreign income |
|
- |
|
|
$ |
- |
|
|
|
545,000 |
|
|
$ |
0.03 |
|
Adjusted
net income |
$ |
21,240,000 |
|
|
$ |
1.10 |
|
|
$ |
26,548,000 |
|
|
$ |
1.37 |
|
|
|
|
|
|
|
|
|
|
(a)
Adjusted net income is calculated by applying an income tax rate of
25.0% for the nine months ended December 31, 2018 and 35.5% for the
nine months |
|
|
ended
December 31, 2017; this rate may differ from the period's actual
income tax rate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP Financial Measures |
Exhibit 5 |
|
|
|
|
Three Months Ended December
31, |
|
|
2018 |
|
2017 |
|
|
|
|
|
|
(As Adjusted) |
|
|
$ |
|
Gross Margin |
|
$ |
|
Gross Margin |
GAAP gross profit |
$ |
21,161,000 |
|
|
17.0 |
% |
|
$ |
26,061,000 |
|
25.3 |
% |
Adjustments: |
|
|
|
|
|
|
|
|
Net sales |
|
|
|
|
|
|
|
|
Return
and stock adjustment accruals related to new business and product
line expansion |
|
673,000 |
|
|
|
|
|
- |
|
|
|
Customer
allowances related to new business |
|
2,139,000 |
|
|
|
|
|
1,656,000 |
|
|
|
Impact of
sales price increases related to tariffs |
|
(309,000 |
) |
|
|
|
|
- |
|
|
|
Core
sales and a fixed cost in connection with a cancelled contract |
|
(6,986,000 |
) |
|
|
|
|
- |
|
|
|
Cost of goods sold |
|
|
|
|
|
|
|
|
New
product line start-up and ramp-up costs, and transition
expenses |
|
2,078,000 |
|
|
|
|
|
803,000 |
|
|
|
Revaluation - cores on customers' shelves and inventory step-up
amortization |
|
2,619,000 |
|
|
|
|
|
2,227,000 |
|
|
|
Cost of
customer allowances and stock adjustment accruals related to new
business and product line expansion |
|
(51,000 |
) |
|
|
|
|
- |
|
|
|
Tariff
costs paid for products sold before price increases were
effective |
|
1,835,000 |
|
|
|
|
|
- |
|
|
|
Cost of
goods sold for cores recorded in connection with a cancelled
contract |
|
7,750,000 |
|
|
|
|
|
- |
|
|
Total adjustments |
|
9,748,000 |
|
|
8.8 |
% |
|
|
4,686,000 |
|
4.1 |
% |
Adjusted
gross profit |
$ |
30,909,000 |
|
|
25.8 |
% |
|
$ |
30,747,000 |
|
29.4 |
% |
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP Financial Measures |
Exhibit 6 |
|
|
|
|
Nine Months Ended December
31, |
|
|
2018 |
|
2017 |
|
|
|
|
|
|
(As Adjusted) |
|
|
$ |
|
Gross Margin |
|
$ |
|
Gross Margin |
GAAP gross profit |
$ |
63,224,000 |
|
|
18.4 |
% |
|
$ |
77,940,000 |
|
|
25.3 |
% |
Adjustments: |
|
|
|
|
|
|
|
|
Net sales |
|
|
|
|
|
|
|
|
Return
and stock adjustment accruals related to new business and product
line expansion |
|
673,000 |
|
|
|
|
|
2,496,000 |
|
|
|
|
Customer
allowances related to new business |
|
6,494,000 |
|
|
|
|
|
3,401,000 |
|
|
|
|
Impact of
sales price increases related to tariffs |
|
(309,000 |
) |
|
|
|
|
- |
|
|
|
|
Core
sales and a fixed cost in connection with a cancelled contract |
|
(6,986,000 |
) |
|
|
|
|
- |
|
|
|
|
Cost of goods sold |
|
|
|
|
|
|
|
|
New
product line start-up and ramp-up costs, and transition
expenses |
|
5,666,000 |
|
|
|
|
|
803,000 |
|
|
|
|
Revaluation - cores on customers' shelves and inventory step-up
amortization |
|
11,466,000 |
|
|
|
|
|
6,532,000 |
|
|
|
|
Cost of
customer allowances and stock adjustment accruals related to new
business and product line expansion |
|
(51,000 |
) |
|
|
|
|
(362,000 |
) |
|
|
|
Tariff
costs paid for products sold before price increases were
effective |
|
1,835,000 |
|
|
|
|
|
- |
|
|
|
|
Cost of
goods sold for cores recorded in connection with a cancelled
contract |
|
7,750,000 |
|
|
|
|
|
- |
|
|
|
Total adjustments |
|
26,538,000 |
|
|
7.7 |
% |
|
|
12,870,000 |
|
|
3.6 |
% |
Adjusted
gross profit |
$ |
89,762,000 |
|
|
26.1 |
% |
|
$ |
90,810,000 |
|
|
28.9 |
% |
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP Financial Measures |
|
|
Exhibit 7 |
|
|
|
|
|
|
Three Months Ended December 31, |
|
Nine Months Ended December 31, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
|
(As Adjusted) |
|
|
|
(As Adjusted) |
GAAP net
(loss) income |
$ |
(3,102,000 |
) |
|
$ |
(2,527,000 |
) |
|
$ |
(5,084,000 |
) |
|
$ |
10,888,000 |
|
Interest expense, net |
|
5,764,000 |
|
|
|
3,953,000 |
|
|
|
16,538,000 |
|
|
|
10,789,000 |
|
Income tax (benefit) expense |
|
(1,035,000 |
) |
|
|
6,994,000 |
|
|
|
(1,301,000 |
) |
|
|
15,026,000 |
|
Depreciation and amortization |
|
1,715,000 |
|
|
|
1,169,000 |
|
|
|
4,933,000 |
|
|
|
3,322,000 |
|
EBITDA |
$ |
3,342,000 |
|
|
$ |
9,589,000 |
|
|
$ |
15,086,000 |
|
|
$ |
40,025,000 |
|
|
|
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
|
Net sales |
|
|
|
|
|
|
|
|
Return and stock
adjustment accruals related to new business and product line
expansion |
|
673,000 |
|
|
|
- |
|
|
|
673,000 |
|
|
|
2,496,000 |
|
|
Customer
allowances related to new business |
|
2,139,000 |
|
|
|
1,656,000 |
|
|
|
6,494,000 |
|
|
|
3,401,000 |
|
|
Impact of
sales price increases related to tariffs |
|
(309,000 |
) |
|
|
- |
|
|
|
(309,000 |
) |
|
|
- |
|
|
Core
sales and a fixed cost in connection with a cancelled contract |
|
(6,986,000 |
) |
|
|
- |
|
|
|
(6,986,000 |
) |
|
|
- |
|
|
Cost of goods sold |
|
|
|
|
|
|
|
|
New
product line start-up and ramp-up costs, and transition
expenses |
|
1,969,000 |
|
|
|
803,000 |
|
|
|
5,399,000 |
|
|
|
803,000 |
|
|
Revaluation - cores on customers' shelves and inventory step-up
amortization |
|
2,619,000 |
|
|
|
2,227,000 |
|
|
|
11,466,000 |
|
|
|
6,532,000 |
|
|
Cost of
customer allowances and stock adjustment accruals related to new
business and product line expansion |
|
(51,000 |
) |
|
|
- |
|
|
|
(51,000 |
) |
|
|
(362,000 |
) |
|
Tariff
costs paid for products sold before price increases were
effective |
|
1,835,000 |
|
|
|
- |
|
|
|
1,835,000 |
|
|
|
- |
|
|
Cost of
goods sold for cores recorded in connection with a cancelled
contract |
|
7,750,000 |
|
|
|
- |
|
|
|
7,750,000 |
|
|
|
- |
|
|
Operating expenses |
|
|
|
|
|
|
|
|
Acquisition, financing, transition (a), severance, new business and
other costs |
|
1,319,000 |
|
|
|
236,000 |
|
|
|
2,825,000 |
|
|
|
737,000 |
|
|
Share-based compensation expenses |
|
1,030,000 |
|
|
|
914,000 |
|
|
|
3,151,000 |
|
|
|
2,658,000 |
|
|
Mark-to-market losses (gains) |
|
860,000 |
|
|
|
1,784,000 |
|
|
|
1,628,000 |
|
|
|
(1,251,000 |
) |
Adjusted
EBITDA |
$ |
16,190,000 |
|
|
$ |
17,209,000 |
|
|
$ |
48,961,000 |
|
|
$ |
55,039,000 |
|
|
|
|
|
|
|
|
|
|
(a) Of the total new product line start-up and ramp-up costs,
and transition expenses of $2,078,000 and $5,666,000 for the three
and nine months ended December 31, 2018, and transition expenses
included in other operating expense adjustments of $1,410,000 and
$3,085,000 for the three and nine months ended December 31, 2018,
$200,000 and $527,000 represents depreciation and amortization
expense
CONTACT:
Gary S. Maier (310) 471-1288
Motorcar Parts and Assoc... (NASDAQ:MPAA)
Historical Stock Chart
From Apr 2024 to May 2024
Motorcar Parts and Assoc... (NASDAQ:MPAA)
Historical Stock Chart
From May 2023 to May 2024