New York
|
|
001-33861
|
|
11-2153962
|
(State or other jurisdiction of incorporation)
|
|
(Commission File Number)
|
|
(IRS Employer Identification No.)
|
2929 California Street, Torrance, CA
|
|
90503
|
(Address of principal executive offices)
|
|
(Zip Code)
|
☐
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
☐
|
Soliciting material pursuant to Rule l4a-12 under the Exchange Act (17 CFR 240.l4a-12)
|
☐
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
☐
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
Title of each class
|
Trading
Symbol(s)
|
Name of each exchange on which registered
|
Common Stock, par value $0.01 per share
|
MPAA
|
The Nasdaq Global Select Market
|
Item 2.02.
|
Results of Operations and Financial Condition
|
Item 9.01.
|
Financial Statements and Exhibits.
|
Exhibit
No.
|
Description
|
|
Press Release, dated June 28, 2019
|
MOTORCAR PARTS OF AMERICA, INC.
|
||
|
|
|
Date: June 28, 2019
|
/s/ David Lee
|
|
|
David Lee
|
|
|
Chief Financial Officer
|
|
NEWS RELEASE
|
CONTACT:
|
Gary S. Maier
|
• |
Non-cash expenses of $8.5 million, including a write-down of $7.4 million associated with the quarterly revaluation for cores on customers’ shelves, and $1.1 million of amortization related to the premium for core buy backs.
|
• |
Transition costs of $2.5 million associated with the move into the larger consolidated distribution center to support the growth in sales.
|
• |
Customer allowances and stock adjustment costs of $1.9 million related to new business.
|
Three Months Ended
March 31,
|
Years Ended
March 31, |
|||||||||||||||
2019
|
2018
|
2019
|
2018
|
|||||||||||||
(Unaudited)
|
||||||||||||||||
(As Adjusted)
|
(As Adjusted)
|
|||||||||||||||
Net sales
|
$
|
129,077,000
|
$
|
119,714,000
|
$
|
472,797,000
|
$
|
427,548,000
|
||||||||
Cost of goods sold
|
103,127,000
|
90,621,000
|
383,623,000
|
320,515,000
|
||||||||||||
Gross profit
|
25,950,000
|
29,093,000
|
89,174,000
|
107,033,000
|
||||||||||||
Operating expenses:
|
||||||||||||||||
General and administrative
|
12,553,000
|
9,059,000
|
45,972,000
|
35,477,000
|
||||||||||||
Sales and marketing
|
5,464,000
|
4,131,000
|
19,542,000
|
15,030,000
|
||||||||||||
Research and development
|
2,440,000
|
1,772,000
|
8,014,000
|
5,692,000
|
||||||||||||
Total operating expenses
|
20,457,000
|
14,962,000
|
73,528,000
|
56,199,000
|
||||||||||||
Operating income
|
5,493,000
|
14,131,000
|
15,646,000
|
50,834,000
|
||||||||||||
Interest expense, net
|
6,689,000
|
4,656,000
|
23,227,000
|
15,445,000
|
||||||||||||
(Loss) income before income tax expense
|
(1,196,000
|
)
|
9,475,000
|
(7,581,000
|
)
|
35,389,000
|
||||||||||
Income tax expense
|
1,569,000
|
1,099,000
|
268,000
|
16,125,000
|
||||||||||||
Net (loss) income
|
$
|
(2,765,000
|
)
|
$
|
8,376,000
|
$
|
(7,849,000
|
)
|
$
|
19,264,000
|
||||||
Basic net (loss) income per share
|
$
|
(0.15
|
)
|
$
|
0.44
|
$
|
(0.42
|
)
|
$
|
1.02
|
||||||
Diluted net (loss) income per share
|
$
|
(0.15
|
)
|
$
|
0.43
|
$
|
(0.42
|
)
|
$
|
0.99
|
||||||
Weighted average number of shares outstanding:
|
||||||||||||||||
Basic
|
18,814,133
|
18,977,295
|
18,849,909
|
18,854,993
|
||||||||||||
Diluted
|
18,814,133
|
19,441,230
|
18,849,909
|
19,514,775
|
2019
|
2018
|
|||||||
ASSETS
|
(As Adjusted)
|
|||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
9,911,000
|
$
|
13,049,000
|
||||
Short-term investments
|
3,273,000
|
2,828,000
|
||||||
Accounts receivable — net
|
56,015,000
|
63,174,000
|
||||||
Inventory— net
|
233,726,000
|
161,210,000
|
||||||
Inventory unreturned
|
8,469,000
|
7,508,000
|
||||||
Contract assets
|
22,183,000
|
23,206,000
|
||||||
Income tax receivable
|
10,009,000
|
7,972,000
|
||||||
Prepaid expenses and other current assets
|
9,296,000
|
8,608,000
|
||||||
Total current assets
|
352,882,000
|
287,555,000
|
||||||
Plant and equipment — net
|
35,151,000
|
28,322,000
|
||||||
Long-term deferred income taxes
|
9,746,000
|
6,698,000
|
||||||
Long-term contract assets
|
221,876,000
|
222,731,000
|
||||||
Goodwill
|
3,205,000
|
2,551,000
|
||||||
Intangible assets — net
|
8,431,000
|
3,766,000
|
||||||
Other assets
|
1,071,000
|
804,000
|
||||||
TOTAL ASSETS
|
$
|
632,362,000
|
$
|
552,427,000
|
||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
92,461,000
|
$
|
73,273,000
|
||||
Accrued liabilities
|
14,604,000
|
12,048,000
|
||||||
Customer finished goods returns accrual
|
22,615,000
|
17,805,000
|
||||||
Contract liabilities
|
30,599,000
|
32,603,000
|
||||||
Revolving loan
|
110,400,000
|
54,000,000
|
||||||
Other current liabilities
|
4,990,000
|
4,471,000
|
||||||
Current portion of term loan
|
3,685,000
|
3,068,000
|
||||||
Total current liabilities
|
279,354,000
|
197,268,000
|
||||||
Term loan, less current portion
|
24,187,000
|
13,913,000
|
||||||
Long-term contract liabilities
|
40,889,000
|
48,183,000
|
||||||
Long-term deferred income taxes
|
257,000
|
226,000
|
||||||
Other liabilities
|
7,920,000
|
5,957,000
|
||||||
Total liabilities
|
352,607,000
|
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; 18,817,400 and 18,893,102 shares issued and outstanding at March 31, 2019 and 2018, respectively
|
188,000
|
189,000
|
||||||
Additional paid-in capital
|
215,047,000
|
213,609,000
|
||||||
Retained earnings
|
71,407,000
|
78,510,000
|
||||||
Accumulated other comprehensive loss
|
(6,887,000
|
)
|
(5,428,000
|
)
|
||||
Total shareholders’ equity
|
279,755,000
|
286,880,000
|
||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
|
$
|
632,362,000
|
$
|
552,427,000
|
Reconciliation of Non-GAAP Financial Measures
|
Exhibit 1 |
Three Months Ended March 31,
|
Twelve Months Ended March 31,
|
|||||||||||||||
2019
|
2018
|
2019
|
2018
|
|||||||||||||
GAAP Results:
|
(As Adjusted)
|
(As Adjusted)
|
||||||||||||||
Net sales
|
$
|
129,077,000
|
$
|
119,714,000
|
$
|
472,797,000
|
$
|
427,548,000
|
||||||||
Net (loss) income
|
(2,765,000
|
)
|
8,376,000
|
(7,849,000
|
)
|
19,264,000
|
||||||||||
(Loss) income per share (EPS)
|
(0.15
|
)
|
0.43
|
(0.42
|
)
|
0.99
|
||||||||||
Gross margin
|
20.1
|
%
|
24.3
|
%
|
18.9
|
%
|
25.0
|
%
|
||||||||
Non-GAAP Adjusted Results:
|
||||||||||||||||
Non-GAAP adjusted net sales
|
$
|
132,659,000
|
$
|
123,357,000
|
$
|
476,251,000
|
$
|
437,088,000
|
||||||||
Non-GAAP adjusted net income
|
12,024,000
|
10,537,000
|
33,263,000
|
37,084,000
|
||||||||||||
Non-GAAP adjusted diluted earnings per share (EPS)
|
0.63
|
0.54
|
1.73
|
1.90
|
||||||||||||
Non-GAAP adjusted gross margin
|
29.4
|
%
|
29.4
|
%
|
27.0
|
%
|
29.1
|
%
|
||||||||
Non-GAAP adjusted EBITDA
|
$
|
24,828,000
|
$
|
22,178,000
|
$
|
73,789,000
|
$
|
77,217,000
|
Reconciliation of Non-GAAP Financial Measures
|
Exhibit 2 |
Three Months Ended March 31,
|
Twelve Months Ended March 31,
|
|||||||||||||||
2019
|
2018
|
2019
|
2018
|
|||||||||||||
(As Adjusted)
|
(As Adjusted)
|
|||||||||||||||
GAAP net sales
|
$
|
129,077,000
|
$
|
119,714,000
|
$
|
472,797,000
|
$
|
427,548,000
|
||||||||
Adjustments:
|
||||||||||||||||
Net sales
|
||||||||||||||||
Return and stock adjustment accruals related to new business and product line expansion
|
1,436,000
|
394,000
|
2,109,000
|
2,890,000
|
||||||||||||
Customer allowances related to new business
|
2,146,000
|
3,249,000
|
8,640,000
|
6,650,000
|
||||||||||||
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
|
)
|
-
|
|||||||||||
Adjusted net sales
|
$
|
132,659,000
|
$
|
123,357,000
|
$
|
476,251,000
|
$
|
437,088,000
|
Reconciliation of Non-GAAP Financial Measures
|
Exhibit 3 |
Three Months Ended March 31,
|
||||||||||||||||
2019
|
2018
|
|||||||||||||||
(As Adjusted)
|
||||||||||||||||
$
|
Per Diluted
Share
|
$
|
Per Diluted
Share
|
|||||||||||||
GAAP net (loss) income
|
$
|
(2,765,000
|
)
|
$
|
(0.15
|
)
|
$
|
8,376,000
|
$
|
0.43
|
||||||
Adjustments:
|
||||||||||||||||
Net sales
|
||||||||||||||||
Return and stock adjustment accruals related to new business and product line expansion
|
1,436,000
|
$
|
0.07
|
394,000
|
$
|
0.02
|
||||||||||
Customer allowances related to new business
|
2,146,000
|
$
|
0.11
|
3,249,000
|
$
|
0.17
|
||||||||||
Cost of goods sold
|
||||||||||||||||
New product line start-up and ramp-up costs, and transition expenses
|
2,512,000
|
$
|
0.13
|
1,028,000
|
$
|
0.05
|
||||||||||
Revaluation - cores on customers’ shelves and inventory step-up amortization
|
7,481,000
|
$
|
0.39
|
2,828,000
|
$
|
0.15
|
||||||||||
Cost of customer allowances and stock adjustment accruals related to new business and product line expansion
|
(530,000
|
)
|
$
|
(0.03
|
)
|
(287,000
|
)
|
$
|
(0.01
|
)
|
||||||
Operating expenses
|
||||||||||||||||
Acquisition, financing, transition, severance, new business, earn-out accruals from acquisitions, restatement-related fees and other costs
|
2,426,000
|
$
|
0.13
|
355,000
|
$
|
0.02
|
||||||||||
Share-based compensation expenses
|
2,413,000
|
$
|
0.13
|
1,108,000
|
$
|
0.06
|
||||||||||
Mark-to-market losses (gains)
|
(656,000
|
)
|
$
|
(0.03
|
)
|
(1,814,000
|
)
|
$
|
(0.09
|
)
|
||||||
Tax effected (a)
|
(2,439,000
|
)
|
$
|
(0.13
|
)
|
(3,119,000
|
)
|
$
|
(0.16
|
)
|
||||||
Tax charge for revaluation of deferred tax assets and liabilities
|
-
|
$
|
-
|
(1,566,000
|
)
|
$
|
(0.08
|
)
|
||||||||
Transition tax on deemed repatriation of accumulated foreign income
|
-
|
$
|
-
|
(15,000
|
)
|
$
|
(0.00
|
)
|
||||||||
Adjusted net income
|
$
|
12,024,000
|
$
|
0.63
|
$
|
10,537,000
|
$
|
0.54
|
Reconciliation of Non-GAAP Financial Measures
|
Exhibit 4 |
Twelve Months Ended March 31,
|
||||||||||||||||
2019
|
2018
|
|||||||||||||||
(As Adjusted)
|
||||||||||||||||
$
|
Per Diluted
Share
|
$
|
Per Diluted
Share
|
|||||||||||||
GAAP net (loss) income
|
$
|
(7,849,000
|
)
|
$
|
(0.42
|
)
|
$
|
19,264,000
|
$
|
0.99
|
||||||
Adjustments:
|
||||||||||||||||
Net sales
|
||||||||||||||||
Return and stock adjustment accruals related to new business and product line expansion
|
2,109,000
|
$
|
0.11
|
2,890,000
|
$
|
0.15
|
||||||||||
Customer allowances related to new business
|
8,640,000
|
$
|
0.45
|
6,650,000
|
$
|
0.34
|
||||||||||
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
|
8,178,000
|
$
|
0.43
|
1,831,000
|
$
|
0.09
|
||||||||||
Revaluation - cores on customers’ shelves and inventory step-up amortization
|
18,947,000
|
$
|
0.99
|
9,360,000
|
$
|
0.48
|
||||||||||
Cost of customer allowances and stock adjustment accruals related to new business and product line expansion
|
(581,000
|
)
|
$
|
(0.03
|
)
|
(649,000
|
)
|
$
|
(0.03
|
)
|
||||||
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, earn-out accruals from acquisitions, restatement-related fees and other costs
|
5,511,000
|
$
|
0.29
|
1,092,000
|
$
|
0.06
|
||||||||||
Share-based compensation expenses
|
5,564,000
|
$
|
0.29
|
3,766,000
|
$
|
0.19
|
||||||||||
Mark-to-market losses (gains)
|
972,000
|
$
|
0.05
|
(3,065,000
|
)
|
$
|
(0.16
|
)
|
||||||||
Interest
|
||||||||||||||||
Write-off of debt issuance costs
|
303,000
|
$
|
0.02
|
231,000
|
$
|
0.01
|
||||||||||
Tax effected (a)
|
(10,821,000
|
)
|
$
|
(0.56
|
)
|
(7,525,000
|
)
|
$
|
(0.39
|
)
|
||||||
Tax charge for revaluation of deferred tax assets and liabilities
|
-
|
$
|
-
|
2,709,000
|
$
|
0.14
|
||||||||||
Transition tax on deemed repatriation of accumulated foreign income
|
-
|
$
|
-
|
530,000
|
$
|
0.03
|
||||||||||
Adjusted net income
|
$
|
33,263,000
|
$
|
1.73
|
$
|
37,084,000
|
$
|
1.90
|
Reconciliation of Non-GAAP Financial Measures
|
Exhibit 5 |
Three Months Ended March 31,
|
||||||||||||||||
2019
|
2018
|
|||||||||||||||
(As Adjusted)
|
||||||||||||||||
$ |
Gross Margin
|
$ |
Gross Margin
|
|||||||||||||
GAAP gross profit
|
$
|
25,950,000
|
20.1
|
%
|
$
|
29,093,000
|
24.3
|
%
|
||||||||
Adjustments:
|
||||||||||||||||
Net sales
|
||||||||||||||||
Return and stock adjustment accruals related to new business and product line expansion
|
1,436,000
|
394,000
|
||||||||||||||
Customer allowances related to new business
|
2,146,000
|
3,249,000
|
||||||||||||||
Cost of goods sold
|
||||||||||||||||
New product line start-up and ramp-up costs, and transition expenses
|
2,512,000
|
1,028,000
|
||||||||||||||
Revaluation - cores on customers’ shelves and inventory step-up amortization
|
7,481,000
|
2,828,000
|
||||||||||||||
Cost of customer allowances and stock adjustment accruals related to new business and product line expansion
|
(530,000
|
)
|
(287,000
|
)
|
||||||||||||
Total adjustments
|
13,045,000
|
9.3
|
%
|
7,212,000
|
5.1
|
%
|
||||||||||
Adjusted gross profit
|
$
|
38,995,000
|
29.4
|
%
|
$
|
36,305,000
|
29.4
|
%
|
Reconciliation of Non-GAAP Financial Measures
|
Exhibit 6 |
Twelve Months Ended March 31,
|
||||||||||||||||
2019
|
2018
|
|||||||||||||||
(As Adjusted)
|
||||||||||||||||
$ |
Gross Margin
|
$ |
Gross Margin
|
|||||||||||||
GAAP gross profit
|
$
|
89,174,000
|
18.9
|
%
|
$
|
107,033,000
|
25.0
|
%
|
||||||||
Adjustments:
|
||||||||||||||||
Net sales
|
||||||||||||||||
Return and stock adjustment accruals related to new business and product line expansion
|
2,109,000
|
2,890,000
|
||||||||||||||
Customer allowances related to new business
|
8,640,000
|
6,650,000
|
||||||||||||||
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
|
8,178,000
|
1,831,000
|
||||||||||||||
Revaluation - cores on customers’ shelves and inventory step-up amortization
|
18,947,000
|
9,360,000
|
||||||||||||||
Cost of customer allowances and stock adjustment accruals related to new business and product line expansion
|
(581,000
|
)
|
(649,000
|
)
|
||||||||||||
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
|
39,583,000
|
8.1
|
%
|
20,082,000
|
4.1
|
%
|
||||||||||
Adjusted gross profit
|
$
|
128,757,000
|
27.0
|
%
|
$
|
127,115,000
|
29.1
|
%
|
Reconciliation of Non-GAAP Financial Measures
|
Exhibit 7 |
Three Months Ended March 31,
|
Twelve Months Ended March 31,
|
|||||||||||||||
2019
|
2018
|
2019
|
2018
|
|||||||||||||
(As Adjusted)
|
(As Adjusted)
|
|||||||||||||||
GAAP net (loss) income
|
$
|
(2,765,000
|
)
|
$
|
8,376,000
|
$
|
(7,849,000
|
)
|
$
|
19,264,000
|
||||||
Interest expense, net
|
6,689,000
|
4,656,000
|
23,227,000
|
15,445,000
|
||||||||||||
Income tax (benefit) expense
|
1,569,000
|
1,099,000
|
268,000
|
16,125,000
|
||||||||||||
Depreciation and amortization
|
2,396,000
|
1,186,000
|
7,329,000
|
4,508,000
|
||||||||||||
EBITDA
|
$
|
7,889,000
|
$
|
15,317,000
|
$
|
22,975,000
|
$
|
55,342,000
|
||||||||
Adjustments:
|
||||||||||||||||
Net sales
|
||||||||||||||||
Return and stock adjustment accruals related to new business and product line expansion
|
1,436,000
|
394,000
|
2,109,000
|
2,890,000
|
||||||||||||
Customer allowances related to new business
|
2,146,000
|
3,249,000
|
8,640,000
|
6,650,000
|
||||||||||||
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 (a)
|
2,396,000
|
1,028,000
|
7,795,000
|
1,831,000
|
||||||||||||
Revaluation - cores on customers’ shelves and inventory step-up amortization
|
7,481,000
|
2,828,000
|
18,947,000
|
9,360,000
|
||||||||||||
Cost of customer allowances and stock adjustment accruals related to new business and product line expansion
|
(530,000
|
)
|
(287,000
|
)
|
(581,000
|
)
|
(649,000
|
)
|
||||||||
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
|
-
|
||||||||||||
Operating expenses
|
||||||||||||||||
Acquisition, financing, transition (a), severance, new business, earn-out accruals from acquisitions, restatement-related fees and other costs
|
2,253,000
|
355,000
|
5,078,000
|
1,092,000
|
||||||||||||
Share-based compensation expenses
|
2,413,000
|
1,108,000
|
5,564,000
|
3,766,000
|
||||||||||||
Mark-to-market losses (gains)
|
(656,000
|
)
|
(1,814,000
|
)
|
972,000
|
(3,065,000
|
)
|
|||||||||
Adjusted EBITDA
|
$
|
24,828,000
|
$
|
22,178,000
|
$
|
73,789,000
|
$
|
77,217,000
|
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