Attached files
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| 8-K - MOTORCAR PARTS OF AMERICA, INC 8-K 9-28-2012 - MOTORCAR PARTS AMERICA INC | form8k.htm |
Exhibit 99.1
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NEWS RELEASE
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CONTACT:
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Gary S. Maier
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Maier & Company, Inc.
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(310) 442-9852
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MOTORCAR PARTS OF AMERICA REPORTS FISCAL 2012
FOURTH QUARTER AND YEAR-END RESULTS
--Acquisition Turnaround Progressing; Record Sales For Rotating Electrical Business--
LOS ANGELES, CA – September 28, 2012 – Motorcar Parts of America, Inc. (Nasdaq: MPAA) today reported results for its fiscal fourth quarter and year ended March 31, 2012 – reflecting record operating results in its rotating electrical business and continued progress in the undercar product line turnaround.
Net sales for the fiscal 2012 fourth quarter increased to $101.5 million from $42.8 million for the same period last year. The company reported a net loss for the fiscal 2012 fourth quarter of $12.9 million, or $1.03 per share, compared with net income of $2.4 million, or $0.19 per diluted share, for the comparable period a year earlier due to the operating losses of the company’s undercar product segment as the transition and turnaround of Fenco continues. Excluding certain Fenco-related and non-cash expenses noted in the Reconciliation of Non-GAAP Financial Measures tables below, results for the 2012 fourth quarter on a consolidated basis would have been a loss of $4.0 million, or $0.32 per share. Earnings for the rotating electrical segment would have been $3.7 million, or $0.30 per diluted share, compared with $2.4 million, or $0.19 per diluted share, a year earlier adjusted for a stand-alone tax rate and foreign exchange gains.
Gross profit for the fiscal 2012 fourth quarter was $7.3 million compared with $14.0 million for the same period a year ago -- reflecting the impact of Fenco. Gross profit as a percentage of net sales for the fiscal 2012 fourth quarter was 7.2 percent compared with 32.7 percent in the same quarter a year ago.
Net sales for the full fiscal year increased to $363.7 million from $161.3 million in fiscal 2011. For the same period, the company reported a net loss of $48.5 million, or $3.90 per share, compared with net income of $12.2 million, or $0.99 per diluted share, a year earlier. Excluding certain Fenco-related and non-cash expenses noted in the Reconciliation of Non-GAAP Financial Measures tables below, results for the full fiscal year on a consolidated basis would have been a loss of $10.4 million, or $0.84 per share. Earnings for the rotating electrical segment would have been $13.0 million, or $1.04 per diluted share, compared with $12.2 million, or $0.99 per diluted share, a year earlier adjusted for a stand-alone tax rate and foreign exchange losses.
(more)
Motorcar Parts of America, Inc.
2-2-2
Gross profit for fiscal 2012 was $27.7 million compared with $51.4 million in fiscal 2011. Gross profit as a percentage of net sales for the rotating electrical business segment was 31.8 percent compared with 31.9 percent a year earlier. Gross profit as a percentage of sales for the undercar product line was a negative 16 percent for fiscal 2012. Gross profit for this segment was impacted by an inefficient operating structure, unprofitable product lines and inadequate legacy pricing. Subsequent to the fiscal year-end, the company has made significant progress towards addressing these issues.
“Notwithstanding Fenco’s results for fiscal 2012, we have made progress in our turnaround efforts for Fenco. Unfortunately, the results provide a dated perspective with regard to the progress made and we are working diligently to become current and compliant with our financial reporting and completing the transition plan,” said Selwyn Joffe, chairman, president and chief executive officer of Motorcar Parts.
He added that the company’s rotating electrical business continues to be robust and provides a proven template going forward for the undercar segment.
Use of EBITDA
EBITDA does not reflect the impact of a number of items that affect the company’s net income, including financing and acquisition-related costs. EBITDA is not a measure of financial performance under GAAP, and should not be considered as an alternative to net income or income from operations as a measure of performance, nor as alternative to net cash from operating activities as a measure of liquidity. EBITDA has significant limitations as an analytical tool, and should not be considered in isolation, or as a substitute for analysis of the company’s results as reported under GAAP. For a reconciliation of net income (loss) attributable to common shareholders to EBITDA, see the financial tables included in this press release.
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 for fiscal year 2012. 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) 668-5023 (domestic) or (973) 638-3231 (international). The call will be archived for seven days on Motorcar Parts of America’s website. A telephone playback of the conference call will also be available from approximately 1:00 p.m. Pacific time today through 8:59 p.m. Pacific time on Friday, October 5, 2012 by calling (855) 859-2056 (domestic) or (404) 537-3406 (international) and using access code: 34787981.
(more)
Motorcar Parts of America, Inc.
3-3-3
About Motorcar Parts of America
Motorcar Parts of America, Inc. is a remanufacturer of alternators and starters utilized in imported and domestic passenger vehicles, light trucks and heavy duty applications. The company also offers a broad line of under-the-car products – including brake, steering and clutch components. Motorcar Parts of America’s products are sold to automotive retail outlets and the professional repair market throughout the United States and Canada, with remanufacturing facilities located in California, Mexico, Malaysia, and administrative offices located in California, Tennessee, Mexico, Canada, Singapore and Malaysia. 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 2011 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 SUBSIDIARIES
Consolidated Statements of Income
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Three Months Ended
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Twelve Months Ended
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March 31,
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March 31,
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2012
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2011
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2012
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2011
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(Unaudited)
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Net sales
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$ | 101,464,000 | $ | 42,786,000 | $ | 363,687,000 | $ | 161,285,000 | ||||||||
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Cost of goods sold
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94,188,000 | 28,804,000 | 335,980,000 | 109,903,000 | ||||||||||||
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Gross profit
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7,276,000 | 13,982,000 | 27,707,000 | 51,382,000 | ||||||||||||
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Operating expenses:
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General and administrative
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9,108,000 | 5,054,000 | 38,881,000 | 17,033,000 | ||||||||||||
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Sales and marketing
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3,785,000 | 1,798,000 | 12,804,000 | 6,537,000 | ||||||||||||
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Research and development
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495,000 | 396,000 | 1,765,000 | 1,549,000 | ||||||||||||
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Impairment of plant and equipment
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- | - | 1,031,000 | - | ||||||||||||
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Acquisition costs
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- | 879,000 | 713,000 | 879,000 | ||||||||||||
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Total operating expenses
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13,388,000 | 8,127,000 | 55,194,000 | 25,998,000 | ||||||||||||
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Operating (loss) income
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(6,112,000 | ) | 5,855,000 | (27,487,000 | ) | 25,384,000 | ||||||||||
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Other expense:
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Interest expense, net
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5,690,000 | 1,055,000 | 14,255,000 | 5,355,000 | ||||||||||||
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(Loss) income before income tax expense
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(11,802,000 | ) | 4,800,000 | (41,742,000 | ) | 20,029,000 | ||||||||||
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Income tax expense
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1,141,000 | 2,362,000 | 6,772,000 | 7,809,000 | ||||||||||||
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Net (loss) income
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$ | (12,943,000 | ) | $ | 2,438,000 | $ | (48,514,000 | ) | $ | 12,220,000 | ||||||
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Basic net (loss) income per share
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$ | (1.03 | ) | $ | 0.20 | $ | (3.90 | ) | $ | 1.01 | ||||||
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Diluted net (loss) income per share
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$ | (1.03 | ) | $ | 0.19 | $ | (3.90 | ) | $ | 0.99 | ||||||
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Weighted average number of shares outstanding:
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Basic
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12,519,421 | 12,054,254 | 12,442,684 | 12,042,428 | ||||||||||||
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Diluted
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12,519,421 | 12,583,726 | 12,442,684 | 12,334,331 | ||||||||||||
MOTORCAR PARTS OF AMERICA, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
March 31,
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2012
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2011
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ASSETS
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Current assets:
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Cash
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$ | 32,617,000 | $ | 2,477,000 | ||||
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Short-term investments
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342,000 | 304,000 | ||||||
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Accounts receivable — net
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20,036,000 | 10,635,000 | ||||||
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Inventory— net
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95,071,000 | 29,733,000 | ||||||
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Inventory unreturned
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9,819,000 | 5,031,000 | ||||||
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Deferred income taxes
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3,793,000 | 5,658,000 | ||||||
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Prepaid expenses and other current assets
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6,553,000 | 6,299,000 | ||||||
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Total current assets
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168,231,000 | 60,137,000 | ||||||
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Plant and equipment — net
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12,738,000 | 11,663,000 | ||||||
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Long-term core inventory — net
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194,406,000 | 80,558,000 | ||||||
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Long-term core inventory deposit
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26,939,000 | 25,984,000 | ||||||
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Long-term deferred income taxes
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1,857,000 | 1,346,000 | ||||||
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Long-term note receivable
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- | 4,863,000 | ||||||
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Goodwill
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68,356,000 | - | ||||||
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Intangible assets — net
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22,484,000 | 5,530,000 | ||||||
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Other assets
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6,887,000 | 1,784,000 | ||||||
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TOTAL ASSETS
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$ | 501,898,000 | $ | 191,865,000 | ||||
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LIABILITIES AND SHAREHOLDERS' EQUITY
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Current liabilities:
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Accounts payable
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$ | 126,100,000 | $ | 38,973,000 | ||||
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Accrued liabilities
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19,379,000 | 7,318,000 | ||||||
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Customer finished goods returns accrual
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21,695,000 | 9,161,000 | ||||||
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Other current liabilities
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2,331,000 | 918,000 | ||||||
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Current portion of term loan
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500,000 | 2,000,000 | ||||||
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Current portion of capital lease obligations
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414,000 | 372,000 | ||||||
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Total current liabilities
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170,419,000 | 58,742,000 | ||||||
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Term loan, less current portion
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84,500,000 | 5,500,000 | ||||||
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Revolving loan
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48,884,000 | - | ||||||
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Deferred core revenue
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9,775,000 | 8,729,000 | ||||||
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Customer core returns accrual
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113,702,000 | - | ||||||
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Other liabilities
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751,000 | 1,255,000 | ||||||
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Capital lease obligations, less current portion
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248,000 | 462,000 | ||||||
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Total liabilities
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428,279,000 | 74,688,000 | ||||||
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Commitments and contingencies
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Shareholders' equity:
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Preferred stock; par value $.01 per share, 5,000,000 shares authorized; none issued…
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- | - | ||||||
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Series A junior participating preferred stock; par value $.01 per share, 20,000 shares authorized; none issued
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- | - | ||||||
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Common stock; par value $.01 per share, 20,000,000 shares authorized; 12,533,821 and 12,078,271 shares issued; 12,519,421 and 12,063,871 outstanding at March 31, 2012 and 2011, respectively
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125,000 | 121,000 | ||||||
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Treasury stock, at cost, 14,400 shares of common stock at March 31, 2012 and 2011, respectively
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(89,000 | ) | (89,000 | ) | ||||
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Additional paid-in capital
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98,627,000 | 93,140,000 | ||||||
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Additional paid-in capital-warrant
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1,879,000 | 1,879,000 | ||||||
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Accumulated other comprehensive loss
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(884,000 | ) | (349,000 | ) | ||||
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Retained (deficit) earnings
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(26,039,000 | ) | 22,475,000 | |||||
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Total shareholders' equity
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73,619,000 | 117,177,000 | ||||||
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TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
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$ | 501,898,000 | $ | 191,865,000 | ||||
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 or in the webcast to discuss the Company's financial results for the fourth quarter and fiscal year ended 2012. 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.
Beginning with the first quarter of fiscal year 2012, the company has begun providing segment information. The two segments are defined as rotating electrical and acquired Fenco products now referred to as the undercar segment. Currently all corporate expenses are included under the rotating electrical segment. The results of operations of Fenco have been included from the date of acquisition on May 6, 2011. Income statement information relating to the Company’s reportable segments for the three months and twelve months ended March 31, 2012 is as follows:
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Three months ended March 31, 2012 (Unaudited)
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Rotating
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Undercar
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As Reported
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Adjusted
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Income statement
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Electrical
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Product Line
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(1) |
Eliminations
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Consolidated
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Adjustment
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Consolidated
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Net sales
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$ | 51,903,000 | $ | 55,176,000 | $ | - | $ | 107,079,000 | $ | - | $ | 107,079,000 | |||||||||||||||||
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Contractual customer penalties/unique customer allowances
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(C) | (5,615,000 | ) | (2) | (5,615,000 | ) | 5,615,000 | - | |||||||||||||||||||||
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Net sales total
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51,903,000 | 49,561,000 | - | 101,464,000 | 5,615,000 | 107,079,000 | |||||||||||||||||||||||
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Cost of goods sold
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35,054,000 | 59,524,000 | 94,578,000 | 94,578,000 | |||||||||||||||||||||||||
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Unusual inventory purchases and freight expenses
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(B) | 257,000 | (2) | 257,000 | (257,000 | ) | - | ||||||||||||||||||||||
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Additional production costs
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(B) | 1,198,000 | (2) | 1,198,000 | (1,198,000 | ) | - | ||||||||||||||||||||||
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Inventory step-up adjustment from purchase accounting
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(B) | (1,845,000 | ) | (2) | (1,845,000 | ) | 1,845,000 | - | |||||||||||||||||||||
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Cost of goods sold total
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35,054,000 | 59,134,000 | - | 94,188,000 | 390,000 | 94,578,000 | |||||||||||||||||||||||
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Gross profit (loss)
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16,849,000 | (9,573,000 | ) | - | 7,276,000 | 5,225,000 | 12,501,000 | ||||||||||||||||||||||
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Gross margin
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32.5 | % | -19.3 | % | 7.2 | % | 11.7 | % | |||||||||||||||||||||
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Gross margin - Adjusted (2)
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32.5 | % | -7.9 | % | (5) | ||||||||||||||||||||||||
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Operating expenses:
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General and administrative
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5,065,000 | 3,150,000 | 8,215,000 | 8,215,000 | |||||||||||||||||||||||||
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G&A - Fenco related, bank financing and professional fees
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(B) | (330,000 | ) | 2,146,000 | 1,816,000 | (1,816,000 | ) | - | |||||||||||||||||||||
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Foreign exchange mark-to-market (gain)/loss
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(B) | (923,000 | ) | (923,000 | ) | 923,000 | - | ||||||||||||||||||||||
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Sales and marketing
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1,870,000 | 1,915,000 | 3,785,000 | 3,785,000 | |||||||||||||||||||||||||
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Research and development
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495,000 | 495,000 | 495,000 | ||||||||||||||||||||||||||
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Total operating expenses
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6,177,000 | 7,211,000 | - | 13,388,000 | (893,000 | ) | 12,495,000 | ||||||||||||||||||||||
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Operating income (loss)
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10,672,000 | (16,784,000 | ) | - | (6,112,000 | ) | 6,118,000 | 6,000 | |||||||||||||||||||||
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Interest expense
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(B) | 2,569,000 | 3,121,000 | 5,690,000 | 5,690,000 | ||||||||||||||||||||||||
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Income (loss) before income tax expense
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8,103,000 | (19,905,000 | ) | - | (11,802,000 | ) | 6,118,000 | (5,684,000 | ) | ||||||||||||||||||||
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Income tax expense
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(B) | 2,083,000 | (942,000 | ) | 1,141,000 | 589,000 | (3) | 1,730,000 | |||||||||||||||||||||
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Net income (loss)
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(A) | $ | 6,020,000 | $ | (18,963,000 | ) | $ | - | $ | (12,943,000 | ) | $ | 5,529,000 | $ | (7,414,000 | ) | |||||||||||||
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Undercar product lines not supported
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3,389,000 | (4) | 3,389,000 | ||||||||||||||||||||||||||
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Net income (loss) - Adjusted
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$ | 8,918,000 | $ | (4,025,000 | ) | ||||||||||||||||||||||||
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Diluted net income (loss) per share
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$ | (1.03 | ) | $ | 0.44 | $ | (0.59 | ) | |||||||||||||||||||||
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Undercar product lines not supported
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$ | 0.27 | (4) | $ | 0.27 | ||||||||||||||||||||||||
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Diluted net income (loss) per share - Adjusted
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$ | 0.71 | $ | (0.32 | ) | ||||||||||||||||||||||||
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Weighted average number of shares outstanding:
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Diluted
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12,519,421 | 12,519,421 | 12,519,421 | ||||||||||||||||||||||||||
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Depreciation and amortization
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(B) | 832,000 | 980,000 | 1,812,000 | |||||||||||||||||||||||||
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Adjusted EBITDA - Sum of (A) and (B) less (C)
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$ | 10,251,000 | $ | (8,433,000 | ) | $ | - | $ | 1,818,000 | ||||||||||||||||||||
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Undercar product lines not supported
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3,389,000 | (4) | 3,389,000 | ||||||||||||||||||||||||||
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Adjusted EBITDA total
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$ | (5,044,000 | ) | $ | 5,207,000 | ||||||||||||||||||||||||
(1) The total of contractual customer penalties/unique customer allowances, unusual inventory purchases and freight expenses, additional production costs, inventory step-up adjustment, and acquisition-related general and administrative expenses including bank financing and other professional fees has an EPS impact of $0.59 for the Undercar Product Line segment.
(2) The total of contractual customer penalties/unique customer allowances, unusual inventory purchases and freight expenses, additional production costs, and inventory step-up adjustment has a gross profit margin impact of 11.4% for the Undercar Product Line segment.
(3) Tax effected for Rotating Electrical at 39% tax rate.
(4) Certain Undercar product lines not supported resulted in a loss for the period from January 1, 2012 to March 31, 2012 of $3,389,000 - ($0.27) per share.
(5) Excludes the further impact of loss from Undercar product lines not supported on gross margin of 6.0%;
Undercar segment adjusted gross margins (including adjustment for product lines not supported) is negative (1.9%).
Reconciliation of Non-GAAP Financial Measures
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Twelve months ended March 31, 2012 (Unaudited)
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Rotating
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Undercar
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As Reported
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Adjusted
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Income statement
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Electrical
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Product Line
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(1) |
Eliminations
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Consolidated
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Adjustment
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Consolidated
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Net sales
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$ | 178,551,000 | $ | 193,065,000 | $ | - | $ | 371,616,000 | $ | - | $ | 371,616,000 | ||||||||||||||||
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Intersegment revenue, net of cost of goods sold
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(C)
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1,853,000 | - | (1,853,000 | ) | - | - | - | ||||||||||||||||||||
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Contractual customer penalties/unique customer allowances
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(C)
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- | (7,929,000 | ) | (2) | - | (7,929,000 | ) | 7,929,000 | - | ||||||||||||||||||
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Net sales total
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180,404,000 | 185,136,000 | (1,853,000 | ) | 363,687,000 | 7,929,000 | 371,616,000 | |||||||||||||||||||||
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Cost of goods sold
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123,072,000 | 200,732,000 | - | 323,804,000 | - | 323,804,000 | ||||||||||||||||||||||
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Intersegment revenue, net of cost of goods sold
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(B)
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- | 1,853,000 | (2) | (1,853,000 | ) | - | - | - | |||||||||||||||||||
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Unusual inventory purchases and freight expenses
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(B)
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- | 3,304,000 | (2) | - | 3,304,000 | (3,304,000 | ) | - | |||||||||||||||||||
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Additional production costs
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(B)
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- | 5,126,000 | (2) | - | 5,126,000 | (5,126,000 | ) | - | |||||||||||||||||||
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Inventory step-up adjustment from purchase accounting
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(B)
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- | 3,746,000 | (2) | - | 3,746,000 | (3,746,000 | ) | - | |||||||||||||||||||
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Cost of goods sold total
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123,072,000 | 214,761,000 | (1,853,000 | ) | 335,980,000 | (12,176,000 | ) | 323,804,000 | ||||||||||||||||||||
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Gross profit (loss)
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57,332,000 | (29,625,000 | ) | - | 27,707,000 | 20,105,000 | 47,812,000 | |||||||||||||||||||||
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Gross margin
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31.8 | % | -16.0 | % | 0.0 | % | 7.6 | % | 12.9 | % | ||||||||||||||||||
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Gross margin - Adjusted (2)
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31.1 | % | -4.0 | % | (5) | |||||||||||||||||||||||
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Operating expenses:
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General and administrative
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17,651,000 | 14,546,000 | - | 32,197,000 | - | 32,197,000 | ||||||||||||||||||||||
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G&A - Fenco related, bank financing and professional fees
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(B)
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2,494,000 | 3,714,000 | - | 6,208,000 | (6,208,000 | ) | - | ||||||||||||||||||||
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Foreign exchange mark-to-market (gain)/loss
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(B)
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476,000 | - | - | 476,000 | (476,000 | ) | - | ||||||||||||||||||||
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Sales and marketing
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7,421,000 | 5,145,000 | - | 12,566,000 | - | 12,566,000 | ||||||||||||||||||||||
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Sales and marketing - Fenco related
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(B)
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238,000 | - | - | 238,000 | (238,000 | ) | - | ||||||||||||||||||||
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Research and development
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1,765,000 | - | - | 1,765,000 | - | 1,765,000 | ||||||||||||||||||||||
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Impairment of plant and equipment
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(B)
|
- | 1,031,000 | - | 1,031,000 | (1,031,000 | ) | - | ||||||||||||||||||||
|
Acquisition costs
|
(B)
|
713,000 | - | - | 713,000 | (713,000 | ) | - | ||||||||||||||||||||
|
Total operating expenses
|
30,758,000 | 24,436,000 | - | 55,194,000 | (8,666,000 | ) | 46,528,000 | |||||||||||||||||||||
|
Operating income (loss)
|
26,574,000 | (54,061,000 | ) | - | (27,487,000 | ) | 28,771,000 | 1,284,000 | ||||||||||||||||||||
|
Interest expense
|
(B)
|
4,841,000 | 9,414,000 | - | 14,255,000 | - | 14,255,000 | |||||||||||||||||||||
|
Income (loss) before income tax expense
|
21,733,000 | (63,475,000 | ) | - | (41,742,000 | ) | 28,771,000 | (12,971,000 | ) | |||||||||||||||||||
|
Income tax expense
|
(B)
|
7,433,000 | (661,000 | ) | - | 6,772,000 | 2,572,000 | (3) | 9,344,000 | |||||||||||||||||||
|
Net income (loss)
|
(A)
|
$ | 14,300,000 | $ | (62,814,000 | ) | $ | - | $ | (48,514,000 | ) | $ | 26,199,000 | $ | (22,315,000 | ) | ||||||||||||
|
Undercar product lines not supported
|
11,924,000 | (4) | 11,924,000 | |||||||||||||||||||||||||
|
Net income (loss) - Adjusted
|
$ | 38,123,000 | $ | (10,391,000 | ) | |||||||||||||||||||||||
|
Diluted net income (loss) per share
|
$ | (3.90 | ) | $ | 2.11 | $ | (1.79 | ) | ||||||||||||||||||||
|
Undercar product lines not supported
|
$ | 0.96 | (4) | $ | 0.96 | |||||||||||||||||||||||
|
Diluted net income (loss) per share - Adjusted
|
$ | 3.06 | $ | (0.84 | ) | |||||||||||||||||||||||
|
Weighted average number of shares outstanding:
|
||||||||||||||||||||||||||||
|
Diluted
|
12,442,684 | 12,442,684 | 12,442,684 | |||||||||||||||||||||||||
|
Depreciation and amortization
|
(B)
|
3,466,000 | 3,884,000 | - | 7,350,000 | |||||||||||||||||||||||
|
Adjusted EBITDA - Sum of (A) and (B) less (C)
|
$ | 32,108,000 | $ | (23,474,000 | ) | $ | - | $ | 8,634,000 | |||||||||||||||||||
|
Undercar product lines not supported
|
11,924,000 | (4) | 11,924,000 | |||||||||||||||||||||||||
|
Adjusted EBITDA total
|
$ | (11,550,000 | ) | $ | 20,558,000 | |||||||||||||||||||||||
(1) The total of contractual customer penalties/unique customer allowances, intersegment costs, unusual inventory purchases and freight expenses, additional production costs, inventory step-up adjustment, acquisition-related general and administrative expenses including bank financing and other professional fees, and impairment of plant and equipment at the CV axle production facility that has been closed has an EPS impact of $2.06 for the Undercar Product Line segment.
(2) The total of contractual customer penalties/unique customer allowances, intersegment costs, unusual inventory purchases and freight expenses, additional production costs, and inventory step-up adjustment has a gross profit margin impact of 12.0% for the Undercar Product Line segment.
The decrease in intersegment revenue, net of cost of goods sold will decrease the revenue and gross profit under the rotating electrical segment by the same amount, which will result in a decrease in gross margin under the rotating electrical segment to 31.1%.
(3) Tax effected for Rotating Electrical at 39% tax rate.
(4) Certain Undercar product lines not supported resulted in a loss for the period from May 7, 2011 to March 31, 2012 of $11,924,000 - ($0.96) per share (including the cost impact of the closure of the CV axle production facility).
(5) Excludes the further impact of loss from Undercar product lines not supported on gross margin of 6.3%. Undercar segment adjusted gross margins (including adjustment for product lines not supported) is 2.3%.
Reconciliation of Non-GAAP Financial Measures
|
Three months ended March 31, 2012 (Unaudited)
|
|||||||||||||
|
As Reported
|
Adjusted
|
||||||||||||
|
Rotating
|
Rotating
|
||||||||||||
|
Income statement
|
Electrical
|
Adjustment
|
Electrical
|
||||||||||
|
Net sales (excluding intersegment revenue)
|
$ | 51,903,000 | $ | 51,903,000 | |||||||||
|
Net sales total
|
51,903,000 | - | 51,903,000 | ||||||||||
|
Cost of goods sold
|
35,054,000 | 35,054,000 | |||||||||||
|
Gross profit
|
16,849,000 | - | 16,849,000 | ||||||||||
|
Gross margin
|
32.5 | % | 32.5 | % | |||||||||
|
Operating expenses:
|
|||||||||||||
|
General and administrative
|
5,065,000 | 5,065,000 | |||||||||||
|
General and administration - Fenco related and professional fees
|
(B)
|
(330,000 | ) | 330,000 | - | ||||||||
|
Foreign exchange mark-to-market (gain)/loss
|
(B)
|
(923,000 | ) | 923,000 | - | ||||||||
|
Sales and marketing
|
1,870,000 | 1,870,000 | |||||||||||
|
Research and development
|
495,000 | 495,000 | |||||||||||
|
Total operating expenses
|
6,177,000 | 1,253,000 | 7,430,000 | ||||||||||
|
Operating income
|
10,672,000 | (1,253,000 | ) | 9,419,000 | |||||||||
|
Interest expense, net
|
(B) | 2,569,000 | 802,000 | (2) | 3,371,000 | ||||||||
|
Income before income tax expense
|
8,103,000 | (2,055,000 | ) | 6,048,000 | |||||||||
|
Income tax expense
|
(B) | 2,083,000 | 276,000 | 2,359,000 | (1) | ||||||||
|
Net income
|
(A) | $ | 6,020,000 | $ | (2,331,000 | ) | $ | 3,689,000 | |||||
|
Diluted net income per share
|
$ | 0.49 | $ | 0.30 | |||||||||
|
Weighted average number of shares outstanding:
|
|||||||||||||
|
Diluted
|
12,278,948 |
(3)
|
12,278,948 | (3) | |||||||||
|
Depreciation and amortization
|
(B) | 832,000 | |||||||||||
|
Adjusted EBITDA - Sum of (A) and (B)
|
$ | 10,251,000 | |||||||||||
(1) Tax effected for Rotating Electrical at 39% tax rate
(2) Represents $802,000 intersegment interest income
(3) Excludes the impact of 360,000 shares in connection with the consideration for the May 6, 2011 Fenco acquisition
Reconciliation of Non-GAAP Financial Measures
|
Twelve months ended March 31, 2012 (Unaudited)
|
|||||||||||||
|
As Reported
|
Adjusted
|
||||||||||||
|
Rotating
|
Rotating
|
||||||||||||
|
Income statement
|
Electrical
|
Adjustment
|
Electrical
|
||||||||||
|
Net sales (excluding intersegment revenue)
|
$ | 178,551,000 | $ | 178,551,000 | |||||||||
|
Intersegment revenue, net of cost of goods sold
|
(C) | 1,853,000 | (1,853,000 | ) | - | ||||||||
|
Net sales total
|
180,404,000 | (1,853,000 | ) | 178,551,000 | |||||||||
|
Cost of goods sold
|
123,072,000 | 123,072,000 | |||||||||||
|
Gross profit
|
57,332,000 | (1,853,000 | ) | 55,479,000 | |||||||||
|
Gross margin
|
31.8 | % | 31.1 | % | |||||||||
|
Operating expenses:
|
|||||||||||||
|
General and administrative
|
17,651,000 | 17,651,000 | |||||||||||
|
General and administration - Fenco related and professional fees
|
(B) | 2,494,000 | (2,494,000 | ) | - | ||||||||
|
Foreign exchange mark-to-market (gain)/loss
|
(B) | 476,000 | (476,000 | ) | - | ||||||||
|
Sales and marketing
|
7,421,000 | 7,421,000 | |||||||||||
|
Sales and marketing - Fenco related
|
(B) | 238,000 | (238,000 | ) | - | ||||||||
|
Research and development
|
1,765,000 | 1,765,000 | |||||||||||
|
Acquisition costs
|
(B) | 713,000 | (713,000 | ) | - | ||||||||
|
Total operating expenses
|
30,758,000 | (3,921,000 | ) | 26,837,000 | |||||||||
|
Operating income
|
26,574,000 | 2,068,000 | 28,642,000 | ||||||||||
|
Interest expense, net
|
(B) | 4,841,000 | 2,529,000 | (2) | 7,370,000 | ||||||||
|
Income before income tax expense
|
21,733,000 | (461,000 | ) | 21,272,000 | |||||||||
|
Income tax expense
|
(B) | 7,433,000 | 863,000 | 8,296,000 | (1) | ||||||||
|
Net income
|
(A) | $ | 14,300,000 | $ | (1,324,000 | ) | $ | 12,976,000 | |||||
|
Diluted net income per share
|
$ | 1.15 | $ | 1.04 | |||||||||
|
Weighted average number of shares outstanding:
|
|||||||||||||
|
Diluted
|
12,429,756 |
(3)
|
12,429,756 | (3) | |||||||||
|
Depreciation and amortization
|
(B) | 3,466,000 | |||||||||||
|
Adjusted EBITDA - Sum of (A) and (B) less (C)
|
$ | 32,108,000 | |||||||||||
(1) Tax effected for Rotating Electrical at 39% tax rate
(2) Represents $2,529,000 intersegment interest income
(3) Excludes the impact of 324,590 shares in connection with the consideration for the May 6, 2011 Fenco acquisition