Attached files
| file | filename |
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| 8-K - MOTORCAR PARTS OF AMERICA, INC 8-K 12-18-2012 - 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) 471-1288
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MOTORCAR PARTS OF AMERICA REPORTS FISCAL 2013 SECOND QUARTER
--Acquisition Transition on Track; Record Sales and Profits for Rotating Electrical Segment --
LOS ANGELES, CA – December 18, 2012 – Motorcar Parts of America, Inc.
(Nasdaq: MPAA) today reported results for its fiscal 2013 second quarter ended September 30, 2012 – reflecting record results for its rotating electrical business and continued progress in the undercar product line transition, which is expected to be completed by May 2013.
Net sales for the fiscal 2013 second quarter increased to $111.6 million from $107.6 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 continues, the company reported a consolidated net loss for the fiscal 2013 second quarter of $8.9 million, or $0.62 per share, compared with a consolidated net loss of $5.4 million, or $0.44 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 second quarter on a consolidated basis would have been a net income of $358,000, or $0.02 per share.
For the fiscal 2013 second quarter, net income for the rotating electrical segment more than doubled to $6.5 million from $3.0 million for the prior year second quarter. Operating income for the rotating electrical segment increased to $13.5 million for the fiscal 2013 second quarter compared with $5.5 million a year ago. On a non-GAAP adjusted basis, EBITDA for the company’s rotating electrical segment was $14.0 million compared with $8.8 million for the same period a year earlier.
Consolidated gross profit for the fiscal 2013 second quarter was $16.7 million compared with $15.0 million for the same period a year ago. Gross profit as a percentage of net sales for the fiscal 2013 second quarter was 15.0 percent compared with 13.9 percent in the same quarter a year ago.
Net sales for the fiscal 2013 six-month period increased 12.6 percent to $200.7 million from $178.1 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 continues, the company reported a consolidated net loss for the fiscal 2013 six-month period of $18.8 million, or $1.32 per share, compared with a consolidated net loss of $13.7 million, or $1.11 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 six-month period on a consolidated basis would have been a net loss of $3.8 million, or $0.27 per share.
(more)
Motorcar Parts of America, Inc.
2-2-2
For the fiscal 2013 six-month period, net income for the rotating electrical segment was $8.9 million compared to $5.3 million for the prior year period. Operating income for the rotating electrical segment almost doubled to $20.2 million for the fiscal 2013 six-month period compared with $10.3 million a year ago. On a non-GAAP adjusted basis, EBITDA for the company’s rotating electrical segment was $21.8 million compared with $15.4 million for the same period a year earlier.
Consolidated gross profit for the fiscal 2013 six months was $28.8 million compared with $22.0 million for the same period a year ago. Gross profit as a percentage of net sales for the same period was 14.4 percent compared with 12.4 percent in the same quarter a year ago.
“Results for the quarter and six months reflect continued progress in our transition of the company’s undercar segment, highlighted by exiting the third-party operated distribution center, significant cost reductions and the successful integration of accounting to the ERP system located at corporate headquarters in Torrance, California to enhance timely financial reporting moving forward,” said Selwyn Joffe, chairman, president and chief executive officer of Motorcar Parts.
“Customer service and product quality remain the cornerstone of our organization, and we are gratified by the extraordinary commitment and contributions of our employees,” Joffe emphasized.
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 Tuesday, December 25, 2012 by calling (855)-859-2056 (domestic) or (404)-537-3406 (international) and using access code: 78053906.
(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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Six Months Ended
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September 30,
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September 30,
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|||||||||||||||
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2012
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2011
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2012
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2011
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Net sales
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$ | 111,632,000 | $ | 107,616,000 | $ | 200,655,000 | $ | 178,126,000 | ||||||||
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Cost of goods sold
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94,911,000 | 92,637,000 | 171,820,000 | 156,114,000 | ||||||||||||
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Gross profit
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16,721,000 | 14,979,000 | 28,835,000 | 22,012,000 | ||||||||||||
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Operating expenses:
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||||||||||||||||
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General and administrative
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11,193,000 | 11,309,000 | 22,757,000 | 19,618,000 | ||||||||||||
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Sales and marketing
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3,904,000 | 3,197,000 | 7,443,000 | 5,650,000 | ||||||||||||
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Research and development
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461,000 | 401,000 | 897,000 | 817,000 | ||||||||||||
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Acquisition costs
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- | 309,000 | - | 713,000 | ||||||||||||
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Total operating expenses
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15,558,000 | 15,216,000 | 31,097,000 | 26,798,000 | ||||||||||||
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Operating income (loss)
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1,163,000 | (237,000 | ) | (2,262,000 | ) | (4,786,000 | ) | |||||||||
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Interest expense, net
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6,162,000 | 3,389,000 | 11,246,000 | 5,303,000 | ||||||||||||
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Loss before income tax expense
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(4,999,000 | ) | (3,626,000 | ) | (13,508,000 | ) | (10,089,000 | ) | ||||||||
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Income tax expense
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3,934,000 | 1,813,000 | 5,287,000 | 3,655,000 | ||||||||||||
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Net loss
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$ | (8,933,000 | ) | $ | (5,439,000 | ) | $ | (18,795,000 | ) | $ | (13,744,000 | ) | ||||
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Basic net loss per share
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$ | (0.62 | ) | $ | (0.44 | ) | $ | (1.32 | ) | $ | (1.11 | ) | ||||
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Diluted net loss per share
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$ | (0.62 | ) | $ | (0.44 | ) | $ | (1.32 | ) | $ | (1.11 | ) | ||||
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Weighted average number of shares outstanding:
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||||||||||||||||
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Basic
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14,456,921 | 12,451,600 | 14,192,235 | 12,367,030 | ||||||||||||
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Diluted
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14,456,921 | 12,451,600 | 14,192,235 | 12,367,030 | ||||||||||||
MOTORCAR PARTS OF AMERICA, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
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September 30, 2012
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March 31, 2012
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ASSETS
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(Unaudited)
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Current assets:
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Cash
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$ | 32,328,000 | $ | 32,617,000 | ||||
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Short-term investments
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368,000 | 342,000 | ||||||
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Accounts receivable — net
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21,829,000 | 20,036,000 | ||||||
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Inventory— net
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82,731,000 | 95,071,000 | ||||||
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Inventory unreturned
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9,318,000 | 9,819,000 | ||||||
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Deferred income taxes
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3,638,000 | 3,793,000 | ||||||
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Prepaid expenses and other current assets
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5,596,000 | 6,553,000 | ||||||
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Total current assets
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155,808,000 | 168,231,000 | ||||||
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Plant and equipment — net
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12,892,000 | 12,738,000 | ||||||
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Long-term core inventory — net
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192,902,000 | 194,406,000 | ||||||
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Long-term core inventory deposit
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27,226,000 | 26,939,000 | ||||||
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Long-term deferred income taxes
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2,147,000 | 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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21,399,000 | 22,484,000 | ||||||
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Other assets
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8,217,000 | 6,887,000 | ||||||
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TOTAL ASSETS
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$ | 488,947,000 | $ | 501,898,000 | ||||
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LIABILITIES AND SHAREHOLDERS' EQUITY
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Current liabilities:
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Accounts payable
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$ | 116,830,000 | $ | 126,100,000 | ||||
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Accrued liabilities
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23,749,000 | 19,379,000 | ||||||
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Customer finished goods returns accrual
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22,647,000 | 21,695,000 | ||||||
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Other current liabilities
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4,831,000 | 2,331,000 | ||||||
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Current portion of term loan
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1,700,000 | 500,000 | ||||||
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Current portion of capital lease obligations
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306,000 | 414,000 | ||||||
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Total current liabilities
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170,063,000 | 170,419,000 | ||||||
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Term loan, less current portion
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92,746,000 | 84,500,000 | ||||||
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Revolving loan
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42,089,000 | 48,884,000 | ||||||
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Deferred core revenue
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10,226,000 | 9,775,000 | ||||||
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Customer core returns accrual
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102,445,000 | 113,702,000 | ||||||
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Other liabilities
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2,779,000 | 751,000 | ||||||
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Capital lease obligations, less current portion
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124,000 | 248,000 | ||||||
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Total liabilities
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420,472,000 | 428,279,000 | ||||||
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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 $.01 per share, 20,000,000 shares authorized; 14,471,321 and 12,533,821 shares issued; 14,456,921 and 12,519,421 outstanding at September 30, 2012 and March 31, 2012, respectively
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145,000 | 125,000 | ||||||
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Treasury stock, at cost, 14,400 shares of common stock at September 30, 2012 and March 31, 2012, respectively
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(89,000 | ) | (89,000 | ) | ||||
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Additional paid-in capital
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114,489,000 | 98,627,000 | ||||||
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Additional paid-in capital-warrant
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- | 1,879,000 | ||||||
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Accumulated other comprehensive loss
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(1,236,000 | ) | (884,000 | ) | ||||
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Accumulated deficit
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(44,834,000 | ) | (26,039,000 | ) | ||||
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Total shareholders' equity
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68,475,000 | 73,619,000 | ||||||
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TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
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$ | 488,947,000 | $ | 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 second 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 and six months ended September 30, 2012 is as follows:
| Reconciliation of Non-GAAP Financial Measures | Exhibit 1 |
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Three months ended September 30, 2012 (Unaudited)
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Adjusted
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Rotating
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Undercar
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As Reported
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Adjustment
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Consolidated
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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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(Non-GAAP)
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(3) |
(Non-GAAP)
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Net sales
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$ | 57,652,000 | $ | 53,980,000 | $ | - | $ | 111,632,000 | $ | 1,317,000 | (4) | $ | 112,949,000 | |||||||||||||||
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Cost of goods sold
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37,556,000 | 57,355,000 | - | 94,911,000 | (2,754,000 | ) | (5) | 92,157,000 | ||||||||||||||||||||
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Gross profit (loss)
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20,096,000 | (3,375,000 | ) | - | 16,721,000 | 4,071,000 | 20,792,000 | |||||||||||||||||||||
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Gross margin
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34.9 | % | -6.3 | % | (2) | 15.0 | % | 18.4 | % | |||||||||||||||||||
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Operating expenses:
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||||||||||||||||||||||||||||
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General and administrative
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4,392,000 | 6,801,000 | - | 11,193,000 | (3,247,000 | ) | (6) | 7,946,000 | ||||||||||||||||||||
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Sales and marketing
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1,724,000 | 2,180,000 | - | 3,904,000 | (747,000 | ) | (7) | 3,157,000 | ||||||||||||||||||||
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Research and development
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461,000 | - | - | 461,000 | 461,000 | |||||||||||||||||||||||
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Total operating expenses
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6,577,000 | 8,981,000 | - | 15,558,000 | (3,994,000 | ) | 11,564,000 | |||||||||||||||||||||
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Operating income (loss)
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13,519,000 | (12,356,000 | ) | - | 1,163,000 | 8,065,000 | 9,228,000 | |||||||||||||||||||||
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Interest expense
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3,093,000 | 3,069,000 | - | 6,162,000 | - | (8) | 6,162,000 |
(B)
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Income (loss) before income tax expense
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10,426,000 | (15,425,000 | ) | - | (4,999,000 | ) | 8,065,000 | 3,066,000 | ||||||||||||||||||||
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Income tax expense
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3,923,000 | 11,000 | - | 3,934,000 | (431,000 | ) | (9) | 3,503,000 |
(B)
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Net income (loss)
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$ | 6,503,000 | $ | (15,436,000 | ) | $ | - | $ | (8,933,000 | ) | $ | 8,496,000 | $ | (437,000 | ) |
(A)
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Undercar product lines not supported
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795,000 | (10) | 795,000 | |||||||||||||||||||||||||
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Net income (loss) - Adjusted
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$ | 9,291,000 | $ | 358,000 | ||||||||||||||||||||||||
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Diluted net income (loss) per share
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$ | (0.62 | ) | $ | 0.59 | $ | (0.03 | ) | ||||||||||||||||||||
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Undercar product lines not supported
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$ | 0.05 | (10) | $ | 0.05 | |||||||||||||||||||||||
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Diluted net income (loss) per share - Adjusted
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$ | 0.64 | $ | 0.02 | ||||||||||||||||||||||||
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Weighted average number of shares outstanding:
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Diluted
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14,456,921 | 14,456,921 | 14,456,921 | |||||||||||||||||||||||||
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Depreciation and amortization
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1,342,000 |
(B)
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Adjusted EBITDA - Sum of (A) and (B)
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$ | 10,570,000 | ||||||||||||||||||||||||||
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Undercar product lines not supported
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795,000 | |||||||||||||||||||||||||||
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Adjusted EBITDA total
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$ | 11,365,000 | ||||||||||||||||||||||||||
(1) The total of contractual customer penalties/unique customer allowances, third-party warehouse exit termination fees, severance, unusual freight expenses, acquisition-related general and administrative expenses including financing and other professional fees, intersegment interest expense and product lines not supported has an EPS impact of $0.71 for the Undercar product line segment.
(2) The total of contractual customer penalties/unique customer allowances, third-party warehouse exit termination fees, severance and unusual freight expenses has a gross profit margin impact of 7.6% for the Undercar product line segment. Adjusted further for the impact on gross margins from the loss from Undercar product lines not supported of 1.5%, total gross margin would have been 2.8% for the Undercar product line segment.
(3) See following Exhibits for detailed segment analysis of results of operations.
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Rotating
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Undercar
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Total
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Electrical
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Product Line
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(4) Contractual customer penalties/unique customer allowances
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1,317,000 | 1,317,000 | ||||||||||
| (5) Third-Party warehouse exit termination fees | 1,402,000 | 1,402,000 | ||||||||||
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Severance
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1,272,000 | 1,272,000 | ||||||||||
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Unusual freight expenses
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80,000 | 80,000 | ||||||||||
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Total
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2,754,000 | 2,754,000 | ||||||||||
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(6) Financing, severance, professional and other fees
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300,000 | 3,445,000 | 3,745,000 | |||||||||
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Mark-to-market (gain)/loss
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(498,000 | ) | (498,000 | ) | ||||||||
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Total
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(198,000 | ) | 3,445,000 | 3,247,000 | ||||||||
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(7) Severance
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747,000 | 747,000 | ||||||||||
(8) Intersegment interest income for the rotating electrical segment and intersegment interest expense for the Undercar product line segment is $1,273,000.
(9) Tax effected for Rotating Electrical at 39% tax rate and Undercar product line at 0% tax rate after further adjusting for intercompany interest income and expense.
(10) Certain Undercar product lines not supported resulted in a loss for the period from July 1, 2012 to September 30, 2012 of $795,000 - ($0.05) per share.
| Reconciliation of Non-GAAP Financial Measures | Exhibit 2 |
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Six months ended September 30, 2012 (Unaudited)
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Adjusted
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||||||||||||||||||||||||||||
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Rotating
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Undercar
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As Reported
|
Adjustment
|
Consolidated
|
||||||||||||||||||||||||
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Income statement
|
Electrical
|
Product Line
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(1) |
Eliminations
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Consolidated
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(Non-GAAP)
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(3) |
(Non-GAAP)
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||||||||||||||||||||
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Net sales
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$ | 104,451,000 | $ | 96,204,000 | $ | - | $ | 200,655,000 | $ | 3,382,000 | (4) | $ | 204,037,000 | |||||||||||||||
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Cost of goods sold
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69,536,000 | 102,284,000 | - | 171,820,000 | (2,799,000 | ) | (5) | 169,021,000 | ||||||||||||||||||||
| Gross profit (loss) | 34,915,000 | (6,080,000 | ) | - | 28,835,000 | 6,181,000 | 35,016,000 | |||||||||||||||||||||
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Gross margin
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33.4 | % | -6.3 | % | (2) | 14.4 | % | 17.2 | % | |||||||||||||||||||
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Operating expenses:
|
||||||||||||||||||||||||||||
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General and administrative
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10,306,000 | 12,451,000 | - | 22,757,000 | (5,972,000 | ) | (6) | 16,785,000 | ||||||||||||||||||||
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Sales and marketing
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3,496,000 | 3,947,000 | - | 7,443,000 | (747,000 | ) | (7) | 6,696,000 | ||||||||||||||||||||
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Research and development
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897,000 | - | - | 897,000 | - | 897,000 | ||||||||||||||||||||||
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Total operating expenses
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14,699,000 | 16,398,000 | - | 31,097,000 | (6,719,000 | ) | 24,378,000 | |||||||||||||||||||||
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Operating income (loss)
|
20,216,000 | (22,478,000 | ) | - | (2,262,000 | ) | 12,900,000 | 10,638,000 | ||||||||||||||||||||
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Interest expense
|
5,989,000 | 5,257,000 | - | 11,246,000 | - | (8) | 11,246,000 |
(B)
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||||||||||||||||||||
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Income (loss) before income tax expense
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14,227,000 | (27,735,000 | ) | - | (13,508,000 | ) | 12,900,000 | (608,000 | ) | |||||||||||||||||||
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Income tax expense
|
5,357,000 | (70,000 | ) | - | 5,287,000 | (599,000 | ) | (9) | 4,688,000 |
(B)
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||||||||||||||||||
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Net income (loss)
|
$ | 8,870,000 | $ | (27,665,000 | ) | $ | - | $ | (18,795,000 | ) | $ | 13,499,000 | $ | (5,296,000 | ) |
(A)
|
||||||||||||
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Undercar product lines not supported
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1,506,000 | (10) | 1,506,000 | |||||||||||||||||||||||||
|
Net income (loss) - Adjusted
|
$ | 15,005,000 | $ | (3,790,000 | ) | |||||||||||||||||||||||
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Diluted net income (loss) per share
|
$ | (1.32 | ) | $ | 0.95 | $ | (0.37 | ) | ||||||||||||||||||||
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Undercar product lines not supported
|
$ | 0.11 | (10) | $ | 0.11 | |||||||||||||||||||||||
|
Diluted net income (loss) per share - Adjusted
|
$ | 1.06 | $ | (0.27 | ) | |||||||||||||||||||||||
| Weighted average number of shares outstanding: | ||||||||||||||||||||||||||||
|
Diluted
|
14,192,235 | 14,192,235 | 14,192,235 | |||||||||||||||||||||||||
|
Depreciation and amortization
|
2,728,000 |
(B)
|
||||||||||||||||||||||||||
|
Adjusted EBITDA - Sum of (A) and (B)
|
$ | 13,366,000 | ||||||||||||||||||||||||||
|
Undercar product lines not supported
|
1,506,000 | |||||||||||||||||||||||||||
|
Adjusted EBITDA total
|
$ | 14,872,000 | ||||||||||||||||||||||||||
(1) The total of contractual customer penalties/unique customer allowances, third-party warehouse exit termination fees, severance, unusual freight expenses, acquisition-related general and administrative expenses including financing and other professional fees, intersegment interest expense and product lines not supported has an EPS impact of $1.16 for the Undercar product line segment.
(2) The total of contractual customer penalties/unique customer allowances, third-party warehouse exit termination fees, severance and unusual freight expenses has a gross profit margin impact of 6.4% for the Undercar product line segment. Adjusted further for the impact on gross margins from the loss from Undercar product lines not supported of 1.5%, total gross margin would have been 1.6% for the Undercar product line segment.
(3) See following Exhibits for detailed segment analysis of results of operations.
| Rotating | Undercar | |||||||||||
| Electrical | Product Line | Total | ||||||||||
|
(4) Contractual customer penalties/unique customer allowances
|
- | 3,382,000 | 3,382,000 | |||||||||
|
(5) Third-party warehouse exit termination fees
|
- | 1,402,000 | 1,402,000 | |||||||||
|
Severance
|
- | 1,272,000 | 1,272,000 | |||||||||
|
Unusual freight expenses
|
- | 125,000 | 125,000 | |||||||||
|
Total
|
- | 2,799,000 | 2,799,000 | |||||||||
| (6) Financing, severance, professional and other fees | 539,000 | 5,831,000 | 6,370,000 | |||||||||
|
Mark-to-market (gain)/loss
|
(398,000 | ) | - | (398,000 | ) | |||||||
|
Total
|
141,000 | 5,831,000 | 5,972,000 | |||||||||
|
(7) Severance
|
- | 747,000 | 747,000 | |||||||||
(8) Intersegment interest income for the rotating electrical segment and intersegment interest expense for the Undercar product line segment is $2,168,000.
(9) Tax effected for Rotating Electrical at 39% tax rate and Undercar product line at 0% tax rate after further adjusting for intercompany interest income and expense.
(10) Certain Undercar product lines not supported resulted in a loss for the period from April 1, 2012 to September 30, 2012 of $1,506,000 - ($0.11) per share.
| Reconciliation of Non-GAAP Financial Measures | Exhibit 3 |
|
Three months ended September 30, 2012 (Unaudited)
|
|||||||||||||||
|
Adjusted
|
|||||||||||||||
|
As Reported
|
Undercar
|
||||||||||||||
|
Undercar
|
Adjustment
|
Product Line
|
|||||||||||||
|
Income statement
|
Product Line
|
(Non-GAAP)
|
(1) |
(Non-GAAP)
|
|||||||||||
|
Net sales
|
$ | 53,980,000 | $ | 1,317,000 | (3) | $ | 55,297,000 | ||||||||
|
Cost of goods sold
|
57,355,000 | (2,754,000 | ) | (4) | 54,601,000 | ||||||||||
|
Gross profit (loss)
|
(3,375,000 | ) | 4,071,000 | 696,000 | |||||||||||
|
Gross margin
|
-6.3 | % | 1.3 | % | (2) | ||||||||||
|
Operating expenses:
|
|||||||||||||||
|
General and administrative
|
6,801,000 | (3,445,000 | ) | (5) | 3,356,000 | ||||||||||
|
Sales and marketing
|
2,180,000 | (747,000 | ) | (6) | 1,433,000 | ||||||||||
|
Total operating expenses
|
8,981,000 | (4,192,000 | ) | 4,789,000 | |||||||||||
|
Operating income (loss)
|
(12,356,000 | ) | 8,263,000 | (4,093,000 | ) | ||||||||||
|
Interest expense
|
3,069,000 | (1,273,000 | ) | (7) | 1,796,000 |
(B)
|
|||||||||
|
Income (loss) before income tax expense
|
(15,425,000 | ) | 9,536,000 | (5,889,000 | ) | ||||||||||
|
Income tax expense
|
11,000 | - | (8) | 11,000 |
(B)
|
||||||||||
|
Net income (loss)
|
$ | (15,436,000 | ) | $ | 9,536,000 | $ | (5,900,000 | ) |
(A)
|
||||||
|
Undercar product lines not supported
|
795,000 | (9) | |||||||||||||
|
Net income (loss) - Adjusted
|
$ | (5,105,000 | ) | ||||||||||||
|
Diluted net income (loss) per share
|
$ | (0.41 | ) | ||||||||||||
|
Undercar product lines not supported
|
$ | 0.05 | (9) | ||||||||||||
|
Diluted net income (loss) per share - Adjusted
|
$ | (0.35 | ) | ||||||||||||
|
Weighted average number of shares outstanding:
|
|||||||||||||||
|
Diluted
|
14,456,921 | ||||||||||||||
|
Depreciation and amortization
|
638,000 |
(B)
|
|||||||||||||
|
Adjusted EBITDA - Sum of (A) and (B)
|
$ | (3,455,000 | ) | ||||||||||||
|
Undercar product lines not supported
|
795,000 | ||||||||||||||
|
Adjusted EBITDA total
|
$ | (2,660,000 | ) | ||||||||||||
(1) The total of contractual customer penalties/unique customer allowances, third-party warehouse exit termination fees, severance, unusual freight expenses, acquisition-related general and administrative expenses including financing and other professional fees, intersegment interest expense and product lines not supported has an EPS impact of $0.71 for the Undercar product line segment.
(2) The total of contractual customer penalties/unique customer allowances, third-party warehouse exit termination fees, severance and unusual freight expenses has a gross profit margin impact of 7.6% for the Undercar product line segment. Adjusted further for the impact on gross margins from the loss from Undercar product lines not supported of 1.5%, total gross margin would have been 2.8% for the Undercar product line segment.
|
(3) Contractual customer penalties/unique customer allowances
|
1,317,000 | |||
|
(4) Third-party warehouse exit termination fees
|
1,402,000 | |||
|
Severance
|
1,272,000 | |||
|
Unusual freight expenses
|
80,000 | |||
|
Total
|
2,754,000 | |||
|
(5) Financing, severance, professional and other fees
|
3,445,000 | |||
|
(6) Severance
|
747,000 |
(7) Intersegment interest expense for the Undercar product line segment is $1,273,000.
(8) Tax effected for Undercar product line at 0% tax rate.
(9) Certain Undercar product lines not supported resulted in a loss for the period from July 1, 2012 to September 30, 2012 of $795,000 - ($0.05) per share.
| Reconciliation of Non-GAAP Financial Measures | Exhibit 4 |
|
Three months ended September 30, 2012 (Unaudited)
|
|||||||||||||||
|
Adjusted
|
|||||||||||||||
|
As Reported
|
Undercar
|
||||||||||||||
|
Undercar
|
Adjustment
|
Product Line
|
|||||||||||||
|
Income statement
|
Product Line
|
(Non-GAAP)
|
(1) |
(Non-GAAP)
|
|||||||||||
|
Net sales
|
$ | 96,204,000 | $ | 3,382,000 | (3) | $ | 99,586,000 | ||||||||
|
Cost of goods sold
|
102,284,000 | (2,799,000 | ) | (4) | 99,485,000 | ||||||||||
|
Gross profit (loss)
|
(6,080,000 | ) | 6,181,000 | 101,000 | |||||||||||
|
Gross margin
|
-6.3 | % | 0.1 | % | (2) | ||||||||||
|
Operating expenses:
|
|||||||||||||||
|
General and administrative
|
12,451,000 | (5,831,000 | ) | (5) | 6,620,000 | ||||||||||
|
Sales and marketing
|
3,947,000 | (747,000 | ) | (6) | 3,200,000 | ||||||||||
|
Total operating expenses
|
16,398,000 | (6,578,000 | ) | 9,820,000 | |||||||||||
|
Operating income (loss)
|
(22,478,000 | ) | 12,579,000 | (9,719,000 | ) | ||||||||||
|
Interest expense
|
5,257,000 | (2,168,000 | ) | (7) | 3,089,000 |
(B)
|
|||||||||
|
Income (loss) before income tax expense
|
(27,735,000 | ) | 14,927,000 | (12,808,000 | ) | ||||||||||
|
Income tax expense
|
(70,000 | ) | - | (8) | (70,000 | ) |
(B)
|
||||||||
|
Net income (loss)
|
$ | (27,665,000 | ) | $ | 14,927,000 | $ | (12,738,000 | ) |
(A)
|
||||||
|
Undercar product lines not supported
|
1,506,000 | (9) | |||||||||||||
|
Net income (loss) - Adjusted
|
$ | (11,232,000 | ) | ||||||||||||
|
Diluted net income (loss) per share
|
$ | (0.90 | ) | ||||||||||||
|
Undercar product lines not supported
|
$ | 0.11 | (9) | ||||||||||||
|
Diluted net income (loss) per share - Adjusted
|
$ | (0.79 | ) | ||||||||||||
|
Weighted average number of shares outstanding:
|
|||||||||||||||
|
Diluted
|
14,192,235 | ||||||||||||||
|
Depreciation and amortization
|
1,289,000 |
(B)
|
|||||||||||||
|
Adjusted EBITDA - Sum of (A) and (B)
|
$ | (8,430,000 | ) | ||||||||||||
|
Undercar product lines not supported
|
1,506,000 | ||||||||||||||
|
Adjusted EBITDA total
|
$ | (6,924,000 | ) | ||||||||||||
(1) The total of contractual customer penalties/unique customer allowances, third-party warehouse exit termination fees, severance, unusual freight expenses, acquisition-related general and administrative expenses including financing and other professional fees, intersegment interest expense and product lines not supported has an EPS impact of $0.71 for the Undercar product line segment.
(2) The total of contractual customer penalties/unique customer allowances, third-party warehouse exit termination fees, severance and unusual freight expenses has a gross profit margin impact of 7.6% for the Undercar product line segment. Adjusted further for the impact on gross margins from the loss from Undercar product lines not supported of 1.5%, total gross margin would have been 2.8% for the Undercar product line segment.
|
(3) Contractual customer penalties/unique customer allowances
|
3,382,000 | |||
|
(4) Third-party warehouse exit termination fees
|
1,402,000 | |||
|
Severance
|
1,272,000 | |||
|
Unusual freight expenses
|
125,000 | |||
|
Total
|
2,799,000 | |||
|
(5) Financing, severance, professional and other fees
|
5,813,000 | |||
|
(6) Severance
|
747,000 |
(7) Intersegment interest expense for the Undercar product line segment is $2,168,000.
(8) Tax effected for Undercar product line at 0% tax rate.
(9) Certain Undercar product lines not supported resulted in a loss for the period from April 1, 2012 to September 30, 2012 of $1,506,000 - ($0.11) per share.
| Reconciliation of Non-GAAP Financial Measures | Exhibit 5 |
| Three months ended September 30, 2011 (Unaudited) | |||||||||||||||
|
Adjusted
|
|||||||||||||||
|
As Reported
|
Rotating
|
||||||||||||||
|
Rotating
|
Adjustment
|
Electrical
|
|||||||||||||
|
Income statement
|
Electrical
|
(Non-GAAP)
|
(Non-GAAP)
|
||||||||||||
|
Net sales
|
$ | 57,652,000 | $ | - | $ | 57,652,000 | |||||||||
|
Cost of goods sold
|
37,556,000 | - | 37,556,000 | ||||||||||||
|
Gross profit
|
20,096,000 | - | 20,096,000 | ||||||||||||
|
Gross margin
|
34.9 | % | 34.9 | % | |||||||||||
|
Operating expenses:
|
|||||||||||||||
|
General and administrative
|
4,392,000 | 198,000 | (1) | 4,590,000 | |||||||||||
|
Sales and marketing
|
1,724,000 | - | 1,724,000 | ||||||||||||
|
Research and development
|
461,000 | - | 461,000 | ||||||||||||
|
Total operating expenses
|
6,577,000 | 198,000 | 6,775,000 | ||||||||||||
|
Operating income
|
13,519,000 | (198,000 | ) | 13,321,000 | |||||||||||
|
Interest expense
|
3,093,000 | 1,273,000 | (2) | 4,366,000 |
(B)
|
||||||||||
|
Income before income tax expense
|
10,426,000 | (1,471,000 | ) | 8,955,000 | |||||||||||
|
Income tax expense
|
3,923,000 | (431,000 | ) | (3) | 3,492,000 |
(B)
|
|||||||||
|
Net income
|
$ | 6,503,000 | $ | (1,040,000 | ) | $ | 5,463,000 |
(A)
|
|||||||
|
Diluted net income per share
|
$ | 0.39 | |||||||||||||
|
Weighted average number of shares outstanding:
|
|||||||||||||||
|
Diluted
|
14,139,628 | (4) | |||||||||||||
|
Depreciation and amortization
|
704,000 |
(B)
|
|||||||||||||
|
Adjusted EBITDA - Sum of (A) and (B)
|
$ | 14,025,000 | |||||||||||||
|
(1) Financing and other fees
|
300,000 | |||
|
Mark-to-market (gain)/loss
|
(498,000 | ) | ||
|
Total
|
(198,000 | ) |
(2) Intersegment interest expense for the Undercar product line segment is $1,273,000.
(3) Tax effected for Rotating Electrical at 39% tax rate.
(4) 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 | Exhibit 6 |
|
Six months ended September 30, 2012 (Unaudited)
|
|||||||||||||||
|
Adjusted
|
|||||||||||||||
|
As Reported
|
Rotating
|
||||||||||||||
|
Rotating
|
Adjustment
|
Electrical
|
|||||||||||||
|
Income statement
|
Electrical
|
(Non-GAAP)
|
(Non-GAAP)
|
||||||||||||
|
Net sales
|
$ | 104,451,000 | $ | - | $ | 104,451,000 | |||||||||
|
Cost of goods sold
|
69,536,000 | - | 69,536,000 | ||||||||||||
|
Gross profit
|
34,915,000 | - | 34,915,000 | ||||||||||||
|
Gross margin
|
33.4 | % | 33.4 | % | |||||||||||
|
Operating expenses:
|
|||||||||||||||
|
General and administrative
|
10,306,000 | (141,000 | ) | (1) | 10,165,000 | ||||||||||
|
Sales and marketing
|
3,496,000 | - | 3,496,000 | ||||||||||||
|
Research and development
|
897,000 | - | 897,000 | ||||||||||||
|
Total operating expenses
|
14,699,000 | (141,000 | ) | 14,558,000 | |||||||||||
|
Operating income
|
20,216,000 | 141,000 | 20,357,000 | ||||||||||||
|
Interest expense
|
5,989,000 | 2,168,000 | (2) | 8,157,000 |
(B)
|
||||||||||
|
Income before income tax expense
|
14,227,000 | (2,027,000 | ) | 12,200,000 | |||||||||||
|
Income tax expense
|
5,357,000 | (599,000 | ) | (3) | 4,758,000 |
(B)
|
|||||||||
|
Net income
|
$ | 8,870,000 | $ | (1,428,000 | ) | $ | 7,442,000 |
(A)
|
|||||||
|
Diluted net income per share
|
$ | 0.54 | |||||||||||||
|
Weighted average number of shares outstanding:
|
|||||||||||||||
|
Diluted
|
13,888,715 | (4) | |||||||||||||
|
Depreciation and amortization
|
1,439,000 |
(B)
|
|||||||||||||
|
Adjusted EBITDA - Sum of (A) and (B)
|
$ | 21,796,000 | |||||||||||||
|
(1) Financing and other fees
|
539,000 | |||
|
Mark-to-market (gain)/loss
|
(398,000 | ) | ||
|
Total
|
141,000 |
(2) Intersegment interest expense for the Undercar product line segment is $2,168,000.
(3) Tax effected for Rotating Electrical at 39% tax rate.
(4) 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 | Exhibit 7 |
| Three months ended September 30, 2011 (Unaudited) | |||||||||||||||
|
Adjusted
|
|||||||||||||||
|
As Reported
|
Rotating
|
||||||||||||||
|
Rotating
|
Adjustment
|
Electrical
|
|||||||||||||
|
Income statement
|
Electrical
|
(Non-GAAP)
|
(Non-GAAP)
|
||||||||||||
|
Net sales
|
$ | 46,573,000 | $ | (836,000 | ) | (1) | $ | 45,737,000 | |||||||
|
Cost of goods sold
|
31,482,000 | - | 31,482,000 | ||||||||||||
|
Gross profit
|
15,091,000 | (836,000 | ) | 14,255,000 | |||||||||||
|
Gross margin
|
32.4 | % | 31.2 | % | |||||||||||
|
Operating expenses:
|
|||||||||||||||
|
General and administrative
|
7,004,000 | (2,911,000 | ) | (2) | 4,093,000 | ||||||||||
|
Sales and marketing
|
1,897,000 | (96,000 | ) | (3) | 1,801,000 | ||||||||||
|
Research and development
|
401,000 | - | 401,000 | ||||||||||||
|
Acquisition costs
|
309,000 | (309,000 | ) | (4) | - | ||||||||||
|
Total operating expenses
|
9,611,000 | (3,316,000 | ) | 6,295,000 | |||||||||||
|
Operating income
|
5,480,000 | 2,480,000 | 7,960,000 | ||||||||||||
|
Interest expense
|
734,000 | 676,000 | (5) | 1,410,000 |
(B)
|
||||||||||
|
Income before income tax expense
|
4,746,000 | 1,804,000 | 6,550,000 | ||||||||||||
|
Income tax expense
|
1,720,000 | 835,000 | (6) | 2,555,000 |
(B)
|
||||||||||
|
Net income
|
$ | 3,026,000 | $ | 969,000 | $ | 3,995,000 |
(A)
|
||||||||
|
Diluted net income per share
|
$ | 0.32 | |||||||||||||
|
Weighted average number of shares outstanding:
|
|||||||||||||||
|
Diluted
|
12,452,770 | (7) | |||||||||||||
|
Depreciation and amortization
|
889,000 |
(B)
|
|||||||||||||
|
Adjusted EBITDA - Sum of (A) and (B)
|
$ | 8,849,000 | |||||||||||||
|
(1) Intersegment revenue, net of cost of goods sold
|
836,000 | |||
|
(2) Fenco, financing, professional and other fees
|
1,112,000 | |||
|
Mark-to-market (gain)/loss
|
1,799,000 | |||
|
Total
|
2,911,000 | |||
|
(3) Fenco related sales and marketing expenses
|
96,000 | |||
|
(4) Fenco related acquisition costs
|
309,000 |
(5) Intersegment interest expense for the Undercar product line segment is $676,000.
(6) Tax effected for Rotating Electrical at 39% tax rate.
(7) 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 | Exhibit 8 |
| Six months ended September 30, 2011 (Unaudited) | |||||||||||||||
|
Adjusted
|
|||||||||||||||
|
As Reported
|
Rotating
|
||||||||||||||
|
Rotating
|
Adjustment
|
Electrical
|
|||||||||||||
|
Income statement
|
Electrical
|
(Non-GAAP)
|
(Non-GAAP)
|
||||||||||||
|
Net sales
|
$ | 86,365,000 | $ | (1,612,000 | ) | (1) | $ | 84,753,000 | |||||||
|
Cost of goods sold
|
58,518,000 | - | 58,518,000 | ||||||||||||
|
Gross profit
|
27,847,000 | (1,612,000 | ) | 26,235,000 | |||||||||||
|
Gross margin
|
32.2 | % | 31.0 | % | |||||||||||
|
Operating expenses:
|
|||||||||||||||
|
General and administrative
|
12,314,000 | (4,087,000 | ) | (2) | 8,227,000 | ||||||||||
|
Sales and marketing
|
3,731,000 | (126,000 | ) | (3) | 3,605,000 | ||||||||||
|
Research and development
|
817,000 | - | 817,000 | ||||||||||||
|
Acquisition costs
|
713,000 | (713,000 | ) | (4) | - | ||||||||||
|
Total operating expenses
|
17,575,000 | (4,926,000 | ) | 12,649,000 | |||||||||||
|
Operating income
|
10,272,000 | 3,314,000 | 13,586,000 | ||||||||||||
|
Interest expense
|
1,505,000 | 945,000 | (5) | 2,450,000 | (B) | ||||||||||
|
Income before income tax expense
|
8,767,000 | 2,369,000 | 11,136,000 | ||||||||||||
|
Income tax expense
|
3,515,000 | 829,000 | (6) | 4,343,000 | (B) | ||||||||||
|
Net income
|
$ | 5,252,000 | $ | 1,540,000 | $ | 6,793,000 | (A) | ||||||||
|
Diluted net income per share
|
$ | 0.54 | |||||||||||||
|
Weighted average number of shares outstanding:
|
|||||||||||||||
|
Diluted
|
12,573,725 | (7) | |||||||||||||
|
Depreciation and amortization
|
1,777,000 | (B) | |||||||||||||
|
Adjusted EBITDA - Sum of (A) and (B)
|
$ | 15,363,000 | |||||||||||||
|
(1) Intersegment revenue, net of cost of goods sold
|
1,612,000 | |||
|
(2) Fenco, financing, professional and other fees
|
2,200,000 | |||
|
Mark-to-market (gain)/loss
|
1,887,000 | |||
|
Total
|
4,087,000 | |||
|
(3) Fenco related sales and marketing expenses
|
126,000 | |||
|
(4) Fenco related acquisition costs
|
713,000 |
(5) Intersegment interest expense for the Undercar product line segment is $945,000.
(6) Tax effected for Rotating Electrical at 39% tax rate.
(7) Excludes the impact of 289,180 shares in connection with the consideration for the May 6, 2011 Fenco acquisition.