Attached files
| file | filename |
|---|---|
| 8-K - MOTORCAR PARTS OF AMERICA, INC 8-K 11-28-2012 - MOTORCAR PARTS AMERICA INC | form8k.htm |
Exhibit 99.1
 |
NEWS RELEASE
|
| CONTACT: Gary S. Maier | |
|
Maier & Company, Inc.
|
|
|
(310) 471-1288
|
MOTORCAR PARTS OF AMERICA REPORTS FISCAL 2013 FIRST QUARTER
--Significant Acquisition Transition Progress Continues Subsequent to June 2012 First Quarter;
Rotating Electrical Business Remains Strong--
LOS ANGELES, CA – November 28, 2012 – Motorcar Parts of America, Inc.
(Nasdaq: MPAA) today reported results for its fiscal 2013 first quarter ended June 30, 2012 – reflecting ongoing operating strength of its rotating electrical business and continued progress in the undercar product line transition with an anticipated completion by May 2013.
Net sales for the fiscal 2013 first quarter increased 26.3 percent to $89.0 million from $70.5 million for the same period last year. As anticipated, due to the operating losses of the company’s undercar product line segment as the transition and turnaround of Fenco continues, the company reported a net loss for the fiscal 2013 first quarter of $9.9 million, or $0.71 per share, compared with a net loss of $8.3 million, or $0.68 per share, for the comparable period a year earlier. Excluding certain undercar-related transition and non-cash expenses noted in the Reconciliation of Non-GAAP Financial Measures tables below, results for the fiscal 2013 first quarter on a consolidated basis would have been a net loss of $4.5 million, or $0.32 per share.
Reflecting the impact of higher interest expense for the fiscal 2013 first quarter, non-GAAP adjusted net income for the rotating electrical segment was $2.0 million, or $0.15 per diluted share, compared with $2.8 million, or $0.22 per diluted share, a year earlier. Operating income for the rotating electrical segment increased to $6.7 million for the fiscal 2013 first quarter compared with $4.8 million a year ago. On a non-GAAP adjusted basis, EBITDA for the company’s rotating electrical segment was $7.8 million, a record for a first quarter, compared with $6.5 million for the same period a year earlier.
Gross profit for the fiscal 2013 first quarter was $12.1 million compared with $7.0 million for the same period a year ago. Gross profit as a percentage of net sales for the fiscal 2013 first quarter was 13.6 percent compared with 10.0 percent in the same quarter a year ago.
Gross profit as a percentage of net sales for the rotating electrical business segment for the fiscal 2013 first quarter was 31.7 percent compared with 32.1 percent in fiscal 2012 first quarter. Gross profit as a percentage of sales for the undercar segment was -6.4 percent for the fiscal 2013 first quarter compared with -17.5 percent for the fiscal 2012 first quarter. Gross profit for the undercar segment was impacted by an inefficient operating structure, unprofitable product lines, inadequate legacy pricing and transition costs which are the focus of the transition plan discussed above.
(more)
Motorcar Parts of America, Inc.
2-2-2
“Notwithstanding Fenco’s (undercar segment) results for the fiscal 2013 first quarter, we have made significant progress subsequent to June, which continues to support our previous targeted EBITDA guidance of $15 million run rate starting in May 2013. It is important to note that the results for the June quarter provide a dated perspective with regard to the progress made and we are working diligently to become current with our financial reporting next month,” 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.
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 today through 8:59 p.m. Pacific time on Wednesday, December 5, 2012 by calling (855)-859-2056 (domestic) or (404)-537-3406 (international) and using access code: 72458970.
(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 and 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 September 2012 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
(Unaudited)
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Three Months Ended
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||||||||
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June 30,
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||||||||
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2012
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2011
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||||||
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Net sales
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$ | 89,023,000 | $ | 70,510,000 | ||||
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Cost of goods sold
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76,909,000 | 63,477,000 | ||||||
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Gross profit
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12,114,000 | 7,033,000 | ||||||
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Operating expenses:
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||||||||
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General and administrative
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11,564,000 | 8,309,000 | ||||||
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Sales and marketing
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3,539,000 | 2,453,000 | ||||||
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Research and development
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436,000 | 416,000 | ||||||
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Acquisition costs
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- | 404,000 | ||||||
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Total operating expenses
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15,539,000 | 11,582,000 | ||||||
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Operating loss
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(3,425,000 | ) | (4,549,000 | ) | ||||
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Interest expense, net
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5,084,000 | 1,914,000 | ||||||
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Loss before income tax expense
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(8,509,000 | ) | (6,463,000 | ) | ||||
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Income tax expense
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1,353,000 | 1,842,000 | ||||||
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Net loss
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$ | (9,862,000 | ) | $ | (8,305,000 | ) | ||
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Basic net loss per share
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$ | (0.71 | ) | $ | (0.68 | ) | ||
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Diluted net loss per share
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$ | (0.71 | ) | $ | (0.68 | ) | ||
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Weighted average number of shares outstanding:
|
||||||||
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Basic
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13,924,641 | 12,281,530 | ||||||
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Diluted
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13,924,641 | 12,281,530 | ||||||
MOTORCAR PARTS OF AMERICA, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
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June 30, 2012
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March 31, 2012
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ASSETS
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(Unaudited)
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|||||||
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Current assets:
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||||||||
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Cash
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$ | 36,082,000 | $ | 32,617,000 | ||||
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Short-term investments
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337,000 | 342,000 | ||||||
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Accounts receivable — net
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17,151,000 | 20,036,000 | ||||||
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Inventory— net
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88,039,000 | 95,071,000 | ||||||
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Inventory unreturned
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10,829,000 | 9,819,000 | ||||||
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Deferred income taxes
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3,611,000 | 3,793,000 | ||||||
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Prepaid expenses and other current assets
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5,281,000 | 6,553,000 | ||||||
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Total current assets
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161,330,000 | 168,231,000 | ||||||
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Plant and equipment — net
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12,233,000 | 12,738,000 | ||||||
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Long-term core inventory — ne
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195,419,000 | 194,406,000 | ||||||
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Long-term core inventory deposit
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27,108,000 | 26,939,000 | ||||||
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Long-term deferred income taxes
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2,141,000 | 1,857,000 | ||||||
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Goodwill
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68,356,000 | 68,356,000 | ||||||
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Intangible assets — net
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21,941,000 | 22,484,000 | ||||||
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Other assets
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7,408,000 | 6,887,000 | ||||||
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TOTAL ASSETS
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$ | 495,936,000 | $ | 501,898,000 | ||||
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LIABILITIES AND SHAREHOLDERS' EQUITY
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||||||||
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Current liabilities:
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||||||||
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Accounts payable
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$ | 108,971,000 | $ | 126,100,000 | ||||
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Accrued liabilities
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16,032,000 | 19,379,000 | ||||||
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Customer finished goods returns accrual
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24,398,000 | 21,695,000 | ||||||
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Other current liabilities
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2,617,000 | 2,331,000 | ||||||
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Current portion of term loan
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1,100,000 | 500,000 | ||||||
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Current portion of capital lease obligations
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348,000 | 414,000 | ||||||
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Total current liabilities
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153,466,000 | 170,419,000 | ||||||
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Term loan, less current portion
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93,314,000 | 84,500,000 | ||||||
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Revolving loan
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46,631,000 | 48,884,000 | ||||||
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Deferred core revenue
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10,022,000 | 9,775,000 | ||||||
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Customer core returns accrual
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113,380,000 | 113,702,000 | ||||||
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Other liabilities
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1,744,000 | 751,000 | ||||||
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Capital lease obligations, less current portion
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183,000 | 248,000 | ||||||
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Total liabilities
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418,740,000 | 428,279,000 | ||||||
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Commitments and contingencies
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||||||||
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Shareholders' equity:
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||||||||
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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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- | - | ||||||
| Common stock; par value $.01 per share, 20,000,000 shares authorized; 14,471,321 and 12,533,821 shares issued; 14,456,921 and 12,519,421 outstanding at June 30, 2012 and March 31, 2012, respectively | 145,000 | 125,000 | ||||||
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Treasury stock, at cost, 14,400 shares of common stock at June 30, 2012 and March 31, 2012, respectively
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(89,000 | ) | (89,000 |
)
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||||
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Additional paid-in capital
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114,479,000 | 98,627,000 | ||||||
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Additional paid-in capital-warrant
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- | 1,879,000 | ||||||
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Accumulated other comprehensive loss
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(1,438,000 | ) | (884,000 | ) | ||||
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Accumulated deficit
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(35,901,000 | ) | (26,039,000 | ) | ||||
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Total shareholders' equity
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77,196,000 | 73,619,000 | ||||||
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TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
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$ | 495,936,000 | $ | 501,898,000 | ||||
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 first quarter of fiscal year 2013. 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. Income statement information relating to the Company’s reportable segments for the three months ended June 30, 2012 is as follows:
| Three Months Ended June 30, 2012 (Unaudited) | |||||||||||||||||||||||||||||
|
Rotating
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Undercar
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As Reported
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Adjustment
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Adjusted
Consolidated
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|||||||||||||||||||||||||
| Income statement |
Electrical
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Product Line | (1 | ) |
Eliminations
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Consolidated
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(Non-GAAP)
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(Non-GAAP) | |||||||||||||||||||||
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Net sales, adjusted
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$ | 46,799,000 | $ | 44,289,000 | $ | - | $ | 91,088,000 | $ | - | $ | 91,088,000 | |||||||||||||||||
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Contractual customer penalties/unique customer allowances
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(C)
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- | (2,065,000 | ) | (2 | ) | - | (2,065,000 | ) | 2,065,000 | - | ||||||||||||||||||
|
Net sales
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46,799,000 | 42,224,000 | - | 89,023,000 | 2,065,000 | 91,088,000 | |||||||||||||||||||||||
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Cost of goods sold, adjusted
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31,980,000 | 44,884,000 | - | 76,864,000 | 76,864,000 | ||||||||||||||||||||||||
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Unusual freight expenses
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(B)
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- | 45,000 | (2 | ) | - | 45,000 | (45,000 | ) | - | |||||||||||||||||||
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Cost of goods sold
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31,980,000 | 44,929,000 | - | 76,909,000 | (45,000 | ) | 76,864,000 | ||||||||||||||||||||||
|
Gross profit (loss)
|
14,819,000 | (2,705,000 | ) | - | 12,114,000 | 2,110,000 | 14,224,000 | ||||||||||||||||||||||
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Gross margin
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31.7 | % | -6.4 | % | 13.6 | % | 15.6 | % | |||||||||||||||||||||
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Gross margin - Adjusted (2)
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31.7 | % | -1.3 | % | (5 | ) | |||||||||||||||||||||||
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Operating expenses:
|
|||||||||||||||||||||||||||||
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General and administrative, adjusted
|
5,575,000 | 3,264,000 | - | 8,839,000 | 8,839,000 | ||||||||||||||||||||||||
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G&A - Fenco related, financing and professional fees
|
(B)
|
239,000 | 2,386,000 | - | 2,625,000 | (2,625,000 | ) | - | |||||||||||||||||||||
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Mark-to-market (gain)/loss
|
(B)
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100,000 | - | - | 100,000 | (100,000 | ) | - | |||||||||||||||||||||
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Sales and marketing
|
1,772,000 | 1,767,000 | - | 3,539,000 | 3,539,000 | ||||||||||||||||||||||||
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Research and development
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436,000 | - | - | 436,000 | 436,000 | ||||||||||||||||||||||||
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Total operating expenses
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8,122,000 | 7,417,000 | - | 15,539,000 | (2,725,000 | ) | 12,814,000 | ||||||||||||||||||||||
|
Operating income (loss)
|
6,697,000 | (10,122,000 | ) | - | (3,425,000 | ) | 4,835,000 | 1,410,000 | |||||||||||||||||||||
|
Interest expense
|
(B)
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2,896,000 | 2,188,000 | - | 5,084,000 | 5,084,000 | |||||||||||||||||||||||
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Income (loss) before income tax expense
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3,801,000 | (12,310,000 | ) | - | (8,509,000 | ) | 4,835,000 | (3,674,000 | ) | ||||||||||||||||||||
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Income tax expense
|
(B)
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1,434,000 | (81,000 | ) | - | 1,353,000 | 181,000 | (3 | ) | 1,534,000 | |||||||||||||||||||
|
Net income (loss)
|
(A)
|
$ | 2,367,000 | (12,229,000 | ) | $ | - | $ | (9,862,000 | ) | $ | 4,654,000 | $ | (5,208,000 | ) | ||||||||||||||
| - | - | ||||||||||||||||||||||||||||
|
Undercar product lines not supported
|
711,000 | (4 | ) | 711,000 | |||||||||||||||||||||||||
|
Net income (loss) - Adjusted
|
$ | 5,365,000 | $ | (4,497,000 | ) | ||||||||||||||||||||||||
|
Diluted net income (loss) per share
|
$ | (0.71 | ) | $ | 0.33 | $ | (0.37 | ) | |||||||||||||||||||||
|
Undercar product lines not supported
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$ | 0.05 | (4 | ) | $ | 0.05 | |||||||||||||||||||||||
|
Diluted net income (loss) per share - Adjusted
|
$ | 0.39 | $ | (0.32 | ) | ||||||||||||||||||||||||
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Weighted average number of shares outstanding:
|
|||||||||||||||||||||||||||||
|
Diluted
|
13,924,641 | 13,924,641 | 13,924,641 | ||||||||||||||||||||||||||
|
Depreciation and amortization
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(B)
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735,000 | 651,000 | - | 1,386,000 | ||||||||||||||||||||||||
|
Adjusted EBITDA - Sum of (A) and (B) less (C)
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$ | 7,771,000 | $ | (4,975,000 | ) | $ | - | $ | 2,796,000 | ||||||||||||||||||||
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Undercar product lines not supported
|
711,000 | (4 | ) | 711,000 | |||||||||||||||||||||||||
| Adjusted EBITDA total | $ | (4,264,000 | ) | $ | 3,507,000 | ||||||||||||||||||||||||
(1) The total of contractual customer penalties/unique customer allowances, unusual freight expenses, acquisition-related general and administrative expenses including financing and other professional fees has an EPS impact of $0.32 for the Undercar product line segment.
(2) The total of contractual customer penalties/unique customer allowances and unusual freight expenses has a gross profit margin impact of 5.1% for the Undercar product line segment.
(3) Tax effected for Rotating Electrical at 39% tax rate and Undercar product line at 0% tax rate.
(4) Certain Undercar product lines not supported resulted in a loss for the period from April 1, 2012 to June 30, 2012 of $711,000 - ($0.05) per share.
(5) Excludes the further impact of loss from Undercar product lines not supported on gross margin of 1.6%.
Undercar product line segment adjusted gross margins (including adjustment for product lines not supported) is 0.3%.
Reconciliation of Non-GAAP Financial Measures
|
Three months ended June 30, 2012 (Unaudited)
|
||||||||||||||||||
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As Reported
Rotating
|
Adjustment
|
Adjusted
Rotating |
||||||||||||||||
| Income statement |
Electrical
|
(Non-GAAP) |
(Non-GAAP)
|
|||||||||||||||
|
Net sales
|
$ | 46,799,000 | $ | 46,799,000 | ||||||||||||||
|
Cost of goods sold
|
31,980,000 | 31,980,000 | ||||||||||||||||
|
Gross profit
|
14,819,000 | - | 14,819,000 | |||||||||||||||
|
Gross margin
|
31.7 | % | 31.7 | % | ||||||||||||||
|
Operating expenses:
|
||||||||||||||||||
|
General and administrative, adjusted
|
5,575,000 | 5,575,000 | ||||||||||||||||
|
General and administrative - Financing related
|
(B)
|
239,000 | (239,000 | ) | - | |||||||||||||
|
Mark-to-market (gain)/loss
|
(B)
|
100,000 | (100,000 | ) | - | |||||||||||||
|
Sales and marketing
|
1,772,000 | 1,772,000 | ||||||||||||||||
|
Research and development
|
436,000 | 436,000 | ||||||||||||||||
|
Total operating expenses
|
8,122,000 | (339,000 | ) | 7,783,000 | ||||||||||||||
|
Operating income
|
6,697,000 | 339,000 | 7,036,000 | |||||||||||||||
|
Interest expense
|
(B)
|
2,896,000 | 895,000 | (2 | ) | 3,791,000 | ||||||||||||
|
Income before income tax expense
|
3,801,000 | (556,000 | ) | 3,245,000 | ||||||||||||||
|
Income tax expense
|
(B)
|
1,434,000 | (168,000 | ) | 1,266,000 | (1 | ) | |||||||||||
|
Net income
|
(A)
|
$ | 2,367,000 | $ | (388,000 | ) | $ | 1,979,000 | ||||||||||
|
Diluted net income per share
|
$ | 0.17 | $ | 0.15 | ||||||||||||||
| Weighted average number of shares outstanding: | ||||||||||||||||||
|
Diluted
|
13,564,641 | (3) | 13,564,641 | (3 | ) | |||||||||||||
|
Depreciation and amortization
|
(B)
|
735,000 | ||||||||||||||||
|
Adjusted EBITDA - Sum of (A) and (B)
|
$ | 7,771,000 | ||||||||||||||||
(1) Tax effected for Rotating Electrical at 39% tax rate.
(2) Represents $895,000 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
|
Three months ended June 30, 2011 (Unaudited)
|
||||||||||||||||
|
Adjusted
|
||||||||||||||||
|
As Reported
|
Rotating
|
|||||||||||||||
|
Rotating
|
Adjustment
|
Electrical
|
||||||||||||||
|
Income statement
|
Electrical
|
(Non-GAAP)
|
(Non-GAAP)
|
|||||||||||||
|
Net sales, adjusted
|
$ | 39,016,000 | $ | 39,016,000 | ||||||||||||
|
Intersegment revenue, net of cost of goods sold
|
(C)
|
776,000 | (776,000 | ) | - | |||||||||||
|
Net sales
|
39,792,000 | (776,000 | ) | 39,016,000 | ||||||||||||
|
Cost of goods sold
|
27,036,000 | 27,036,000 | ||||||||||||||
|
Gross profit
|
12,756,000 | (776,000 | ) | 11,980,000 | ||||||||||||
|
Gross margin
|
32.1 | % | 30.7 | % | ||||||||||||
|
Operating expenses:
|
||||||||||||||||
|
General and administrative, adjusted
|
4,134,000 | 4,134,000 | ||||||||||||||
|
General and administration - Fenco related and professional fees
|
(B)
|
1,088,000 | (1,088,000 | ) | - | |||||||||||
|
Foreign exchange mark-to-market (gain)/loss
|
(B)
|
88,000 | (88,000 | ) | - | |||||||||||
|
Sales and marketing, adjusted
|
1,804,000 | 1,804,000 | ||||||||||||||
|
Sales and marketing - Fenco related
|
(B)
|
30,000 | (30,000 | ) | - | |||||||||||
|
Research and development.
|
416,000 | 416,000 | ||||||||||||||
|
Acquisition costs
|
(B)
|
404,000 | (404,000 | ) | - | |||||||||||
|
Total operating expenses
|
7,964,000 | (1,610,000 | ) | 6,354,000 | ||||||||||||
|
Operating income
|
4,792,000 | 834,000 | 5,626,000 | |||||||||||||
|
Interest expense
|
(B)
|
771,000 | 269,000 | (2) | 1,040,000 | |||||||||||
|
Income before income tax expense
|
4,021,000 | 565,000 | 4,586,000 | |||||||||||||
|
Income tax expense (acquisition costs related adjustment)
|
(B)
|
216,000 | (216,000 | ) | (3) | |||||||||||
|
Income tax expense
|
(B)
|
1,579,000 | 210,000 | 1,789,000 | (1) | |||||||||||
|
Net income
|
(A)
|
$ | 2,226,000 | $ | 571,000 | $ | 2,797,000 | |||||||||
|
Diluted net income per share
|
$ | 0.18 | $ | 0.22 | ||||||||||||
|
Weighted average number of shares outstanding:
|
||||||||||||||||
|
Diluted
|
12,598,515 | (4) | 12,598,515 | (4) | ||||||||||||
|
Depreciation and amortization
|
(B)
|
888,000 | ||||||||||||||
|
Adjusted EBITDA - Sum of (A) and (B) less (C)
|
$ | 6,514,000 | ||||||||||||||
(1) Tax effected for Rotating Electrical at 39% tax rate
(2) Represents $269,000 intersegment interest income
(3) Represents additional 5.4% tax in the quarter due to certain non-deductible transaction costs incurred in connection with the Company's acquisition of Fenco
(4) Excludes the impact of 217,582 shares in connection with the consideration for the May 6, 2011 Fenco acquisition