Attached files
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| 8-K - MOTORCAR PARTS OF AMERICA INC 8-K 2-15-2013 - 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 THIRD QUARTER
--Record Rotating Electrical Segment Sales for a Third Quarter--
LOS ANGELES, CA – February 15, 2013 – Motorcar Parts of America, Inc. (Nasdaq: MPAA) today reported results for its fiscal 2013 third quarter ended December 31, 2012 – reflecting record sales for its rotating electrical business and the continued impact of the undercar product line transition.
Net sales for the fiscal 2013 third quarter increased to $116.3 million from $84.1 million for the same period last year. Results for the quarter include revenue of approximately $50.8 million that was recognized as a result of the elimination of the company’s obligation to accept core returns from a customer, previously accrued for in the undercar segment. Net income for the same period was $935,000 or $0.06 per diluted share, compared with a net loss of $21.8 million, or $1.74 per share, a year earlier – reflecting gross profit recognition of $19.1 million in fiscal 2013 related to the elimination of the remanufactured core liability noted above net of recognition of related core inventory costs.
Net sales for the rotating electrical segment increased 20.2 percent to $50.7 million from $42.1 million for the prior year third quarter. Gross profit for rotating electrical was $16.3 million compared with $12.6 million a year earlier. Gross profit as a percentage of sales for the rotating electrical segment increased to 32.2 percent from 30.0 percent last year, reflecting higher sales and better absorption of manufacturing overhead. On a non-GAAP basis, Adjusted EBITDA for the company’s rotating electrical segment was $9.0 million compared with $6.5 million for the same period a year earlier.
Consolidated gross profit for the fiscal 2013 third quarter was $24.0 million compared with negative gross profit of $1.6 million for the same period a year ago. Gross profit as a percentage of net sales for the fiscal 2013 third quarter was 20.7 percent compared with a negative 1.9 percent in the same quarter a year ago.
(more)
Motorcar Parts of America, Inc.
2-2-2
Net sales for the fiscal 2013 nine-month period increased to $316.9 million from $262.2 million for the same period last year. Results for the nine-month period include revenue of approximately $50.8 million that was recognized as a result of the elimination of the company’s obligation to accept core returns from a customer, previously accrued for in the undercar segment. As anticipated due to the impact of the company’s undercar product line segment transition and turnaround, the company reported a consolidated net loss for the fiscal 2013 nine-month period of $17.9 million, or $1.25 per share, compared with a consolidated net loss of $35.6 million, or $2.86 per share, for the comparable period a year earlier.
Net sales for fiscal 2013 nine-month period for the rotating electrical segment increased 20.7 percent to $155.1 million from $128.5 million for the same period last year. Gross profit for rotating electrical was $51.2 million compared with $40.5 million a year earlier. Gross profit as a percentage of sales for the rotating electrical segment for the nine months increased to 33.0 percent from 31.5 percent last year, reflecting higher sales and better absorption of manufacturing overhead. On a non-GAAP basis, Adjusted EBITDA for the company’s rotating electrical segment for the nine months was $30.8 million compared with $21.9 million for the same period a year earlier.
Consolidated gross profit for the fiscal 2013 nine months was $52.9 million compared with $20.4 million for the same period a year ago. Gross profit as a percentage of net sales for the same period was 16.7 percent compared with 7.8 percent in the same period last year.
“Results for the quarter and nine months reflect continued positive momentum in our rotating electrical segment. We have made continued progress in our transition of the company’s undercar segment -- highlighted by the commencement of new undercar product shipments from Torrance, California; exiting the third-party operated distribution in Pennsylvania; the identification of further cost-reductions and streamlining opportunities; and, the relocation of accounting personnel to Torrance from Toronto along with the implementation of our new ERP system. While the transition is progressing well, we are adapting to the new challenges of a downsized Fenco,” said Selwyn Joffe, chairman, president and chief executive officer of Motorcar Parts.
He noted that during the quarter and subsequent to December 31, 2012, the company repurchased an aggregate 154,447 shares and vested options at an average price of $4.89 for $754,670.
Use of Adjusted EBITDA
We defined Adjusted EBITDA as net income (loss), adjusted for various items relating to discontinued customer, share-based compensation and other matters, plus interest expense, income tax expense and depreciation and amortization. Adjusted EBITDA does not reflect the impact of a number of items that affect the company’s net income, including financing, transition and acquisition-related costs. Adjusted 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. Adjusted 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) to Adjusted EBITDA, see the financial tables included in this press release.
(more)
Motorcar Parts of America, Inc.
3-3-3
Management will revise the guidance for the company’s rotating electrical and undercar business segments during its scheduled conference call later today.
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 Thursday, February 21, 2013 by calling (855)-859-2056 (domestic) or (404)-537-3406 (international) and using access code: 99149942.
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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Nine Months Ended
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December 31,
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December 31,
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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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$ | 116,275,000 | $ | 84,097,000 | $ | 316,930,000 | $ | 262,223,000 | ||||||||
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Cost of goods sold
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92,232,000 | 85,678,000 | 264,052,000 | 241,792,000 | ||||||||||||
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Gross profit (loss)
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24,043,000 | (1,581,000 | ) | 52,878,000 | 20,431,000 | |||||||||||
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Operating expenses:
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General and administrative
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12,779,000 | 10,155,000 | 35,536,000 | 29,773,000 | ||||||||||||
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Sales and marketing
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2,687,000 | 3,369,000 | 10,130,000 | 9,019,000 | ||||||||||||
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Research and development
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807,000 | 453,000 | 1,704,000 | 1,270,000 | ||||||||||||
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Impairment of plant and equipment
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- | 1,031,000 | - | 1,031,000 | ||||||||||||
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Acquisition costs
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- | - | - | 713,000 | ||||||||||||
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Total operating expenses
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16,273,000 | 15,008,000 | 47,370,000 | 41,806,000 | ||||||||||||
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Operating income (loss)
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7,770,000 | (16,589,000 | ) | 5,508,000 | (21,375,000 | ) | ||||||||||
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Interest expense, net
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5,889,000 | 3,262,000 | 17,135,000 | 8,565,000 | ||||||||||||
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Income (loss) before income tax expense
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1,881,000 | (19,851,000 | ) | (11,627,000 | ) | (29,940,000 | ) | |||||||||
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Income tax expense
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946,000 | 1,976,000 | 6,233,000 | 5,631,000 | ||||||||||||
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Net income (loss)
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$ | 935,000 | $ | (21,827,000 | ) | $ | (17,860,000 | ) | $ | (35,571,000 | ) | |||||
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Basic net income (loss) per share
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$ | 0.06 | $ | (1.74 | ) | $ | (1.25 | ) | $ | (2.86 | ) | |||||
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Diluted net income (loss) per share
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$ | 0.06 | $ | (1.74 | ) | $ | (1.25 | ) | $ | (2.86 | ) | |||||
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Weighted average number of shares outstanding:
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Basic
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14,463,782 | 12,517,269 | 14,283,080 | 12,417,292 | ||||||||||||
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Diluted
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14,525,613 | 12,517,269 | 14,283,080 | 12,417,292 | ||||||||||||
MOTORCAR PARTS OF AMERICA, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
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December 31, 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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$ | 25,070,000 | $ | 32,617,000 | ||||
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Short-term investments
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383,000 | 342,000 | ||||||
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Accounts receivable — net
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5,171,000 | 20,036,000 | ||||||
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Inventory— net
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85,822,000 | 95,071,000 | ||||||
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Inventory unreturned
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14,127,000 | 9,819,000 | ||||||
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Deferred income taxes
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3,834,000 | 3,793,000 | ||||||
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Prepaid expenses and other current assets
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6,942,000 | 6,553,000 | ||||||
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Total current assets
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141,349,000 | 168,231,000 | ||||||
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Plant and equipment — net
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13,484,000 | 12,738,000 | ||||||
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Long-term core inventory — net
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160,862,000 | 194,406,000 | ||||||
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Long-term core inventory deposits
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27,610,000 | 26,939,000 | ||||||
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Long-term deferred income taxes
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2,151,000 | 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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20,856,000 | 22,484,000 | ||||||
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Other assets
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7,974,000 | 6,887,000 | ||||||
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TOTAL ASSETS
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$ | 442,642,000 | $ | 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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$ | 118,716,000 | $ | 126,100,000 | ||||
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Accrued liabilities
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12,836,000 | 19,379,000 | ||||||
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Customer finished goods returns accrual
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30,164,000 | 21,695,000 | ||||||
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Other current liabilities
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2,493,000 | 2,331,000 | ||||||
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Current portion of term loan
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4,800,000 | 500,000 | ||||||
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Current portion of capital lease obligations
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287,000 | 414,000 | ||||||
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Total current liabilities
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169,296,000 | 170,419,000 | ||||||
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Term loan, less current portion
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89,428,000 | 84,500,000 | ||||||
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Revolving loan
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49,729,000 | 48,884,000 | ||||||
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Deferred core revenue
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10,357,000 | 9,775,000 | ||||||
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Customer core returns accrual
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49,739,000 | 113,702,000 | ||||||
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Other liabilities
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3,748,000 | 751,000 | ||||||
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Capital lease obligations, less current portion
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61,000 | 248,000 | ||||||
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Total liabilities
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372,358,000 | 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 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 $.01 per share, 20,000,000 shares authorized; 14,526,717 and 12,533,821 shares issued; 14,493,197 and 12,519,421 outstanding at December 31, 2012 and March 31, 2012, respectively
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145,000 | 125,000 | ||||||
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Treasury stock, at cost, 33,520 and 14,400 shares of common stock at
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December 31, 2012 and March 31, 2012, respectively
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(189,000 | ) | (89,000 | ) | ||||
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Additional paid-in capital
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115,355,000 | 98,627,000 | ||||||
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Additional paid-in capital-warrant
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- | 1,879,000 | ||||||
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Accumulated other comprehensive loss
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(1,128,000 | ) | (884,000 | ) | ||||
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Accumulated deficit
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(43,899,000 | ) | (26,039,000 | ) | ||||
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Total shareholders' equity
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70,284,000 | 73,619,000 | ||||||
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TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
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$ | 442,642,000 | $ | 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 and in the webcast to discuss the Company's financial results for the fiscal year 2013 and fiscal 2012 third quarter and nine-month period. 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. Income statement information relating to the Company’s reportable segments for the three months and nine months ended December 31, 2012 is as follows:
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Reconciliation of Non-GAAP Financial Measures
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Exhibit 1
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Three months ended December 31, 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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Eliminations
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Consolidated
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(Non-GAAP)
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(1 | ) |
(Non-GAAP)
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||||||||||||||||||||
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Net sales
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$ | 50,658,000 | $ | 65,617,000 | $ | - | $ | 116,275,000 | $ | (42,093,000 | ) | (2 | ) | $ | 74,182,000 | |||||||||||||
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Cost of goods sold
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34,332,000 | 57,900,000 | - | 92,232,000 | (30,219,000 | ) | (3 | ) | 62,013,000 | |||||||||||||||||||
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Gross profit (loss)
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16,326,000 | 7,717,000 | - | 24,043,000 | (11,874,000 | ) | 12,169,000 | |||||||||||||||||||||
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Gross margin
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32.2 | % | 11.8 | % | 20.7 | % | 16.4 | % | ||||||||||||||||||||
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Operating expenses:
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General and administrative
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8,848,000 | 3,931,000 | - | 12,779,000 | (4,054,000 | ) | (4 | ) | 8,725,000 | |||||||||||||||||||
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Sales and marketing
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1,983,000 | 704,000 | - | 2,687,000 | 2,687,000 | |||||||||||||||||||||||
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Research and development
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445,000 | 362,000 | - | 807,000 | 807,000 | |||||||||||||||||||||||
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Total operating expenses
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11,276,000 | 4,997,000 | - | 16,273,000 | (4,054,000 | ) | 12,219,000 | |||||||||||||||||||||
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Operating income (loss)
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5,050,000 | 2,720,000 | - | 7,770,000 | (7,820,000 | ) | (50,000 | ) | ||||||||||||||||||||
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Interest expense, net
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2,384,000 | 3,505,000 | - | 5,889,000 | - | (5 | ) | 5,889,000 |
(B)
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Income (loss) before income tax expense
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2,666,000 | (785,000 | ) | - | 1,881,000 | (7,820,000 | ) | (5,939,000 | ) | |||||||||||||||||||
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Income tax expense
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880,000 | 66,000 | - | 946,000 | 831,000 | (6 | ) | 1,777,000 |
(B)
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Net income (loss)
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$ | 1,786,000 | $ | (851,000 | ) | $ | - | $ | 935,000 | $ | (8,651,000 | ) | $ | (7,716,000 | ) |
(A)
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Undercar product lines not supported
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1,379,000 | (7 | ) | 1,379,000 | ||||||||||||||||||||||||
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Net income (loss) - Adjusted
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$ | (7,272,000 | ) | $ | (6,337,000 | ) | ||||||||||||||||||||||
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Diluted net income (loss) per share
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$ | 0.06 | $ | (0.60 | ) | $ | (0.53 | ) | ||||||||||||||||||||
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Undercar product lines not supported
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$ | 0.09 | (7 | ) | $ | 0.09 | ||||||||||||||||||||||
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Diluted net income (loss) per share - Adjusted
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$ | (0.50 | ) | $ | (0.44 | ) | ||||||||||||||||||||||
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Weighted average number of shares outstanding:
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Diluted
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14,525,613 | 14,525,613 | 14,525,613 | |||||||||||||||||||||||||
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Depreciation and amortization
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1,263,000 |
(B)
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Adjusted EBITDA - Sum of (A) and (B)
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$ | 1,213,000 | ||||||||||||||||||||||||||
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Undercar product lines not supported
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1,379,000 | |||||||||||||||||||||||||||
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Adjusted EBITDA total
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$ | 2,592,000 | ||||||||||||||||||||||||||
(1) 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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Electrical
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Product Line
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Total
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(2) Contractual customer penalties/unique customer allowances
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- | 769,000 | 769,000 | |||||||||
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Stock adjustment - sales
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- | 7,921,000 | 7,921,000 | |||||||||
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Core revenue - discontinued customer
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- | (50,783,000 | ) | (50,783,000 | ) | |||||||
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Total
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- | (42,093,000 | ) | (42,093,000 | ) | |||||||
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(3) Unusual inventory purchases and freight expenses
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- | 349,000 | 349,000 | |||||||||
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Stock adjustment - cost of goods sold
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- | (5,116,000 | ) | (5,116,000 | ) | |||||||
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Inventory obsolescence/write-down/inefficiency
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- | 3,337,000 | 3,337,000 | |||||||||
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Core cost of revenue - discontinued customer
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- | 31,649,000 | 31,649,000 | |||||||||
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Total
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- | 30,219,000 | 30,219,000 | |||||||||
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(4) Financing, severance, professional and other fees
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1,443,000 | 808,000 | 2,251,000 | |||||||||
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Share-based compensation expense
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917,000 | 24,000 | 941,000 | |||||||||
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Mark-to-market (gain)/loss
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862,000 | - | 862,000 | |||||||||
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Total
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3,222,000 | 832,000 | 4,054,000 | |||||||||
(5) Intersegment interest income for the rotating electrical segment and intersegment interest expense for the Undercar product line segment is $1,501,000.
(6) 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.
(7) Certain Undercar product lines not supported resulted in a loss for the period from October 1, 2012 to December 31, 2012 of $1,379,000 - ($0.09) per share.
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Reconciliation of Non-GAAP Financial Measures
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Exhibit 2
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Nine months ended December 31, 2012 (Unaudited)
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||||||||||||||||||||||||||||
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Adjusted
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Rotating
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Undercar
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As Reported
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Adjustment
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Consolidated
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||||||||||||||||||||||||
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Income statement
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Electrical
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Product Line
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Eliminations
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Consolidated
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(Non-GAAP)
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(1 | ) |
(Non-GAAP)
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||||||||||||||||||||
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Net sales
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$ | 155,109,000 | $ | 161,821,000 | $ | - | $ | 316,930,000 | $ | (38,711,000 | ) | (2 | ) | $ | 278,219,000 | |||||||||||||
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Cost of goods sold
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103,868,000 | 160,184,000 | - | 264,052,000 | (33,018,000 | ) | (3 | ) | 231,034,000 | |||||||||||||||||||
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Gross profit (loss)
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51,241,000 | 1,637,000 | - | 52,878,000 | (5,693,000 | ) | 47,185,000 | |||||||||||||||||||||
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Gross margin
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33.0 | % | 1.0 | % | 16.7 | % | 17.0 | % | ||||||||||||||||||||
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Operating expenses:
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||||||||||||||||||||||||||||
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General and administrative
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19,154,000 | 16,382,000 | - | 35,536,000 | (10,026,000 | ) | (4 | ) | 25,510,000 | |||||||||||||||||||
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Sales and marketing
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5,479,000 | 4,651,000 | - | 10,130,000 | (747,000 | ) | (5 | ) | 9,383,000 | |||||||||||||||||||
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Research and development
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1,342,000 | 362,000 | - | 1,704,000 | - | 1,704,000 | ||||||||||||||||||||||
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Total operating expenses
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25,975,000 | 21,395,000 | - | 47,370,000 | (10,773,000 | ) | 36,597,000 | |||||||||||||||||||||
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Operating income (loss)
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25,266,000 | (19,758,000 | ) | - | 5,508,000 | 5,080,000 | 10,588,000 | |||||||||||||||||||||
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Interest expense, net
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8,373,000 | 8,762,000 | - | 17,135,000 | - | (6 | ) | 17,135,000 |
(B)
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|||||||||||||||||||
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Income (loss) before income tax expense
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16,893,000 | (28,520,000 | ) | - | (11,627,000 | ) | 5,080,000 | (6,547,000 | ) | |||||||||||||||||||
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Income tax expense
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6,237,000 | (4,000 | ) | - | 6,233,000 | 232,000 | (7 | ) | 6,465,000 |
(B)
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||||||||||||||||||
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Net income (loss)
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$ | 10,656,000 | $ | (28,516,000 | ) | $ | - | $ | (17,860,000 | ) | $ | 4,848,000 | $ | (13,012,000 | ) |
(A)
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||||||||||||
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Undercar product lines not supported
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2,885,000 | (8 | ) | 2,885,000 | ||||||||||||||||||||||||
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Net income (loss) - Adjusted
|
$ | 7,733,000 | $ | (10,127,000 | ) | |||||||||||||||||||||||
|
Diluted net income (loss) per share
|
$ | (1.25 | ) | $ | 0.34 | $ | (0.91 | ) | ||||||||||||||||||||
|
Undercar product lines not supported
|
$ | 0.20 | (8 | ) | $ | 0.20 | ||||||||||||||||||||||
|
Diluted net income (loss) per share - Adjusted
|
$ | 0.54 | $ | (0.71 | ) | |||||||||||||||||||||||
|
Weighted average number of shares outstanding:
|
||||||||||||||||||||||||||||
|
Diluted
|
14,283,080 | 14,283,080 | 14,283,080 | |||||||||||||||||||||||||
|
Depreciation and amortization
|
3,991,000 |
(B)
|
||||||||||||||||||||||||||
|
Adjusted EBITDA - Sum of (A) and (B)
|
$ | 14,579,000 | ||||||||||||||||||||||||||
|
Undercar product lines not supported
|
2,885,000 | |||||||||||||||||||||||||||
|
Adjusted EBITDA total
|
$ | 17,464,000 | ||||||||||||||||||||||||||
(1) See following Exhibits for detailed segment analysis of results of operations.
|
Rotating
|
Undercar
|
|||||||||||
|
Electrical
|
Product Line
|
Total
|
||||||||||
|
(2) Contractual customer penalties/unique customer allowances
|
- | 4,151,000 | 4,151,000 | |||||||||
|
Stock adjustment - sales
|
- | 7,921,000 | 7,921,000 | |||||||||
|
Core revenue - discontinued customer
|
- | (50,783,000 | ) | (50,783,000 | ) | |||||||
|
Total
|
- | (38,711,000 | ) | (38,711,000 | ) | |||||||
|
(3) Third-party warehouse exit termination fees
|
- | 1,402,000 | 1,402,000 | |||||||||
|
Severance
|
- | 1,272,000 | 1,272,000 | |||||||||
|
Unusual inventory purchases and freight expenses
|
- | 474,000 | 474,000 | |||||||||
|
Stock adjustment - cost of goods sold
|
- | (5,116,000 | ) | (5,116,000 | ) | |||||||
|
Inventory obsolescence/write-down/inefficiency
|
- | 3,337,000 | 3,337,000 | |||||||||
|
Core cost of revenue - discontinued customer
|
- | 31,649,000 | 31,649,000 | |||||||||
|
Total
|
- | 33,018,000 | 33,018,000 | |||||||||
|
(4) Financing, severance, professional and other fees
|
1,982,000 | 6,639,000 | 8,621,000 | |||||||||
|
Share-based compensation expense
|
917,000 | 24,000 | 941,000 | |||||||||
|
Mark-to-market (gain)/loss
|
464,000 | - | 464,000 | |||||||||
|
Total
|
3,363,000 | 6,663,000 | 10,026,000 | |||||||||
|
(5) Severance
|
- | 747,000 | 747,000 | |||||||||
(6) Intersegment interest income for the rotating electrical segment and intersegment interest expense for the Undercar product line segment is $3,669,000.
(7) 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.
(8) Certain Undercar product lines not supported resulted in a loss for the period from April 1, 2012 to December 31, 2012 of $2,885,000 - ($0.20) per share.
|
Reconciliation of Non-GAAP Financial Measures
|
Exhibit 3
|
|
Three months ended December 31, 2012 (Unaudited)
|
|||||||||||||||||
|
Adjusted
|
|||||||||||||||||
|
As Reported
|
Undercar
|
||||||||||||||||
|
Undercar
|
Adjustment
|
Product Line
|
|||||||||||||||
|
Income statement
|
Product Line
|
(Non-GAAP)
|
(Non-GAAP)
|
||||||||||||||
|
Net sales
|
$ | 65,617,000 | $ | (42,093,000 | ) | (2 | ) | $ | 23,524,000 | ||||||||
|
Cost of goods sold
|
57,900,000 | (30,219,000 | ) | (3 | ) | 27,681,000 | |||||||||||
|
Gross profit (loss)
|
7,717,000 | (11,874,000 | ) | (4,157,000 | ) | ||||||||||||
|
Gross margin
|
11.8 | % | -17.7 | % | (1) | ||||||||||||
|
Operating expenses:
|
|||||||||||||||||
|
General and administrative
|
3,931,000 | (832,000 | ) | (4 | ) | 3,099,000 | |||||||||||
|
Sales and marketing
|
704,000 | 704,000 | |||||||||||||||
|
Research and development
|
362,000 | 362,000 | |||||||||||||||
|
Total operating expenses
|
4,997,000 | (832,000 | ) | 4,165,000 | |||||||||||||
|
Operating income (loss)
|
2,720,000 | (11,042,000 | ) | (8,322,000 | ) | ||||||||||||
|
Interest expense, net
|
3,505,000 | (1,501,000 | ) | (5 | ) | 2,004,000 |
(B)
|
||||||||||
|
Income (loss) before income tax expense
|
(785,000 | ) | (9,541,000 | ) | (10,326,000 | ) | |||||||||||
|
Income tax expense
|
66,000 | - | (6 | ) | 66,000 |
(B)
|
|||||||||||
|
Net income (loss)
|
$ | (851,000 | ) | $ | (9,541,000 | ) | $ | (10,392,000 | ) |
(A)
|
|||||||
|
Undercar product lines not supported
|
1,379,000 | (7) | |||||||||||||||
|
Net income (loss) - Adjusted
|
$ | (9,013,000 | ) | ||||||||||||||
|
Diluted net income (loss) per share
|
$ | (0.72 | ) | ||||||||||||||
|
Undercar product lines not supported
|
$ | 0.09 | (7) | ||||||||||||||
|
Diluted net income (loss) per share - Adjusted
|
$ | (0.62 | ) | ||||||||||||||
|
Weighted average number of shares outstanding:
|
|||||||||||||||||
|
Diluted
|
14,525,613 | ||||||||||||||||
|
Depreciation and amortization
|
564,000 |
(B)
|
|||||||||||||||
|
Adjusted EBITDA - Sum of (A) and (B)
|
$ | (7,758,000 | ) | ||||||||||||||
|
Undercar product lines not supported
|
1,379,000 | ||||||||||||||||
|
Adjusted EBITDA total
|
$ | (6,379,000 | ) | ||||||||||||||
(1) Adjusted further for the impact on gross margins from the loss from Undercar product lines not supported of 5.6%, total gross margin would have been negative (12.1%) for the Undercar product line segment.
|
(2) Contractual customer penalties/unique customer allowances
|
769,000 | |||
|
Stock adjustment - sales
|
7,921,000 | |||
|
Core revenue - discontinued customer
|
(50,783,000 | ) | ||
|
Total
|
(42,093,000 | ) | ||
|
(3) Unusual inventory purchases and freight expenses
|
349,000 | |||
|
Stock adjustment - cost of goods sold
|
(5,116,000 | ) | ||
|
Inventory obsolescence/write-down/inefficiency
|
3,337,000 | |||
|
Core cost of revenue - discontinued customer
|
31,649,000 | |||
|
Total
|
30,219,000 | |||
|
(4) Financing, severance, professional and other fees
|
808,000 | |||
|
Share-based compensation expense
|
24,000 | |||
|
Total
|
832,000 |
(5) Intersegment interest expense for the Undercar product line segment is $1,501,000.
(6) Tax effected for Undercar product line at 0% tax rate.
(7) Certain Undercar product lines not supported resulted in a loss for the period from October 1, 2012 to December 31, 2012 of $1,379,000 - ($0.09) per share.
|
Reconciliation of Non-GAAP Financial Measures
|
Exhibit 4
|
|
Nine months ended December 31, 2012 (Unaudited)
|
|||||||||||||||||
|
Adjusted
|
|||||||||||||||||
|
As Reported
|
Undercar
|
||||||||||||||||
|
Undercar
|
Adjustment
|
Product Line
|
|||||||||||||||
|
Income statement
|
Product Line
|
(Non-GAAP)
|
(Non-GAAP)
|
||||||||||||||
|
Net sales
|
$ | 161,821,000 | $ | (38,711,000 | ) | (2 | ) | $ | 123,110,000 | ||||||||
|
Cost of goods sold
|
160,184,000 | (33,018,000 | ) | (3 | ) | 127,166,000 | |||||||||||
|
Gross profit (loss)
|
1,637,000 | (5,693,000 | ) | (4,056,000 | ) | ||||||||||||
|
Gross margin
|
1.0 | % | -3.3 | % | (1) | ||||||||||||
|
Operating expenses:
|
|||||||||||||||||
|
General and administrative
|
16,382,000 | (6,663,000 | ) | (4 | ) | 9,719,000 | |||||||||||
|
Sales and marketing
|
4,651,000 | (747,000 | ) | (5 | ) | 3,904,000 | |||||||||||
|
Research and development
|
362,000 | 362,000 | |||||||||||||||
|
Total operating expenses
|
21,395,000 | (7,410,000 | ) | 13,985,000 | |||||||||||||
|
Operating income (loss)
|
(19,758,000 | ) | 1,717,000 | (18,041,000 | ) | ||||||||||||
|
Interest expense, net
|
8,762,000 | (3,669,000 | ) | (6 | ) | 5,093,000 |
(B)
|
||||||||||
|
Income (loss) before income tax expense
|
(28,520,000 | ) | 5,386,000 | (23,134,000 | ) | ||||||||||||
|
Income tax expense
|
(4,000 | ) | - | (7 | ) | (4,000 | ) |
(B)
|
|||||||||
|
Net income (loss)
|
$ | (28,516,000 | ) | $ | 5,386,000 | $ | (23,130,000 | ) |
(A)
|
||||||||
|
Undercar product lines not supported
|
2,885,000 | (8) | |||||||||||||||
|
Net income (loss) - Adjusted
|
$ | (20,245,000 | ) | ||||||||||||||
|
Diluted net income (loss) per share
|
$ | (1.62 | ) | ||||||||||||||
|
Undercar product lines not supported
|
$ | 0.20 | (8) | ||||||||||||||
|
Diluted net income (loss) per share - Adjusted
|
$ | (1.42 | ) | ||||||||||||||
|
Weighted average number of shares outstanding:
|
|||||||||||||||||
|
Diluted
|
14,283,080 | ||||||||||||||||
|
Depreciation and amortization
|
1,854,000 |
(B)
|
|||||||||||||||
|
Adjusted EBITDA - Sum of (A) and (B)
|
$ | (16,187,000 | ) | ||||||||||||||
|
Undercar product lines not supported
|
2,885,000 | ||||||||||||||||
|
Adjusted EBITDA total
|
$ | (13,302,000 | ) | ||||||||||||||
(1) Adjusted further for the impact on gross margins from the loss from Undercar product lines not supported of 2.3%, total gross margin would have been negative (1.0%) for the Undercar product line segment.
|
(2) Contractual customer penalties/unique customer allowances
|
4,151,000 | |||
|
Stock adjustment - sales
|
7,921,000 | |||
|
Core revenue - discontinued customer
|
(50,783,000 | ) | ||
|
Total
|
(38,711,000 | ) | ||
|
(3) Third-party warehouse exit termination fees
|
1,402,000 | |||
|
Severance
|
1,272,000 | |||
|
Unusual inventory purchases and freight expenses
|
474,000 | |||
|
Stock adjustment - cost of goods sold
|
(5,116,000 | ) | ||
|
Inventory obsolescence/write-down/inefficiency
|
3,337,000 | |||
|
Core cost of revenue - discontinued customer
|
31,649,000 | |||
|
Total
|
33,018,000 | |||
|
(4) Financing, severance, professional and other fees
|
6,639,000 | |||
|
Share-based compensation expense
|
24,000 | |||
|
Total
|
6,663,000 | |||
|
(5) Severance
|
747,000 |
(6) Intersegment interest expense for the Undercar product line segment is $3,669,000.
(7) Tax effected for Undercar product line at 0% tax rate.
(8) Certain Undercar product lines not supported resulted in a loss for the period from April 1, 2012 to September 30, 2012 of $2,885,000 - ($0.20) per share.
|
Reconciliation of Non-GAAP Financial Measures
|
Exhibit 5
|
|
Three months ended December 31, 2012 (Unaudited)
|
||||||||||||||||
|
Adjusted
|
||||||||||||||||
|
As Reported
|
Rotating
|
|||||||||||||||
|
Rotating
|
Adjustment
|
Electrical
|
||||||||||||||
|
Income statement
|
Electrical
|
(Non-GAAP)
|
(Non-GAAP)
|
|||||||||||||
|
Net sales
|
$ | 50,658,000 | $ | - | $ | 50,658,000 | ||||||||||
|
Cost of goods sold
|
34,332,000 | - | 34,332,000 | |||||||||||||
|
Gross profit
|
16,326,000 | - | 16,326,000 | |||||||||||||
|
Gross margin
|
32.2 | % | 32.2 | % | ||||||||||||
|
Operating expenses:
|
||||||||||||||||
|
General and administrative
|
8,848,000 | (3,222,000 | ) | (1 | ) | 5,626,000 | ||||||||||
|
Sales and marketing
|
1,983,000 | - | 1,983,000 | |||||||||||||
|
Research and development
|
445,000 | - | 445,000 | |||||||||||||
|
Total operating expenses
|
11,276,000 | (3,222,000 | ) | 8,054,000 | ||||||||||||
|
Operating income
|
5,050,000 | 3,222,000 | 8,272,000 | |||||||||||||
|
Interest expense, net
|
2,384,000 | 1,501,000 | (2 | ) | 3,885,000 |
(B)
|
||||||||||
|
Income before income tax expense
|
2,666,000 | 1,721,000 | 4,387,000 | |||||||||||||
|
Income tax expense
|
880,000 | 831,000 | (3 | ) | 1,711,000 |
(B)
|
||||||||||
|
Net income
|
$ | 1,786,000 | $ | 890,000 | $ | 2,676,000 |
(A)
|
|||||||||
|
Diluted net income per share
|
$ | 0.19 | ||||||||||||||
|
Weighted average number of shares outstanding:
|
||||||||||||||||
|
Diluted
|
14,165,613 | (4) | ||||||||||||||
|
Depreciation and amortization
|
699,000 |
(B)
|
||||||||||||||
|
Adjusted EBITDA - Sum of (A) and (B)
|
$ | 8,971,000 | ||||||||||||||
|
(1) Financing, severance and other fees
|
1,443,000 | |||||||||||||||
|
Share-based compensation expense
|
917,000 | |||||||||||||||
|
Mark-to-market (gain)/loss
|
862,000 | |||||||||||||||
|
Total
|
3,222,000 | |||||||||||||||
(2) Intersegment interest income from the Undercar product line segment is $1,501,000.
(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
|
|
Nine months ended December 31, 2012 (Unaudited)
|
||||||||||||||||
|
Adjusted
|
||||||||||||||||
|
As Reported
|
Rotating
|
|||||||||||||||
|
Rotating
|
Adjustment
|
Electrical
|
||||||||||||||
|
Income statement
|
Electrical
|
(Non-GAAP)
|
(Non-GAAP)
|
|||||||||||||
|
Net sales
|
$ | 155,109,000 | $ | - | $ | 155,109,000 | ||||||||||
|
Cost of goods sold
|
103,868,000 | - | 103,868,000 | |||||||||||||
|
Gross profit
|
51,241,000 | - | 51,241,000 | |||||||||||||
|
Gross margin
|
33.0 | % | 33.0 | % | ||||||||||||
|
Operating expenses:
|
||||||||||||||||
|
General and administrative
|
19,154,000 | (3,363,000 | ) | (1 | ) | 15,791,000 | ||||||||||
|
Sales and marketing
|
5,479,000 | - | 5,479,000 | |||||||||||||
|
Research and development
|
1,342,000 | - | 1,342,000 | |||||||||||||
|
Total operating expenses
|
25,975,000 | (3,363,000 | ) | 22,612,000 | ||||||||||||
|
Operating income
|
25,266,000 | 3,363,000 | 28,629,000 | |||||||||||||
|
Interest expense, net
|
8,373,000 | 3,669,000 | (2 | ) | 12,042,000 |
(B)
|
||||||||||
|
Income before income tax expense
|
16,893,000 | (306,000 | ) | 16,587,000 | ||||||||||||
|
Income tax expense
|
6,237,000 | 232,000 | (3 | ) | 6,469,000 |
(B)
|
||||||||||
|
Net income
|
$ | 10,656,000 | $ | (538,000 | ) | $ | 10,118,000 |
(A)
|
||||||||
|
Diluted net income per share
|
$ | 0.73 | ||||||||||||||
|
Weighted average number of shares outstanding:
|
||||||||||||||||
|
Diluted
|
13,923,080 | (4) | ||||||||||||||
|
Depreciation and amortization
|
2,137,000 |
(B)
|
||||||||||||||
|
Adjusted EBITDA - Sum of (A) and (B)
|
$ | 30,766,000 | ||||||||||||||
|
(1) Financing, severance and other fees
|
1,982,000 | |||||||||||||||
|
Share-based compensation expense
|
917,000 | |||||||||||||||
|
Mark-to-market (gain)/loss
|
464,000 | |||||||||||||||
|
Total
|
3,363,000 | |||||||||||||||
(2) Intersegment interest income from the Undercar product line segment is $3,669,000.
(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 December 31, 2011 (Unaudited)
|
||||||||||||||||
|
Adjusted
|
||||||||||||||||
|
As Reported
|
Rotating
|
|||||||||||||||
|
Rotating
|
Adjustment
|
Electrical
|
||||||||||||||
|
Income statement
|
Electrical
|
(Non-GAAP)
|
(Non-GAAP)
|
|||||||||||||
|
Net sales
|
$ | 42,136,000 | $ | (241,000 | ) | (1 | ) | $ | 41,895,000 | |||||||
|
Cost of goods sold
|
29,500,000 | - | 29,500,000 | |||||||||||||
|
Gross profit
|
12,636,000 | (241,000 | ) | 12,395,000 | ||||||||||||
|
Gross margin
|
30.0 | % | 29.6 | % | ||||||||||||
|
Operating expenses:
|
||||||||||||||||
|
General and administrative
|
4,495,000 | (136,000 | ) | (2 | ) | 4,359,000 | ||||||||||
|
Sales and marketing
|
2,058,000 | (112,000 | ) | (3 | ) | 1,946,000 | ||||||||||
|
Research and development
|
453,000 | - | 453,000 | |||||||||||||
|
Total operating expenses
|
7,006,000 | (248,000 | ) | 6,758,000 | ||||||||||||
|
Operating income
|
5,630,000 | 7,000 | 5,637,000 | |||||||||||||
|
Interest expense, net
|
767,000 | 782,000 | (4 | ) | 1,549,000 |
(B)
|
||||||||||
|
Income before income tax expense
|
4,863,000 | (775,000 | ) | 4,088,000 | ||||||||||||
|
Income tax expense
|
1,835,000 | (241,000 | ) | (5 | ) | 1,594,000 |
(B)
|
|||||||||
|
Net income
|
$ | 3,028,000 | $ | (534,000 | ) | $ | 2,494,000 |
(A)
|
||||||||
|
Diluted net income per share
|
$ | 0.20 | ||||||||||||||
|
Weighted average number of shares outstanding:
|
||||||||||||||||
|
Diluted
|
12,297,749 | (6) | ||||||||||||||
|
Depreciation and amortization
|
857,000 |
(B)
|
||||||||||||||
|
Adjusted EBITDA - Sum of (A) and (B)
|
$ | 6,494,000 | ||||||||||||||
|
(1) Intersegment revenue, net of cost of goods sold
|
241,000 | |||||||||||||||
|
(2) Fenco, financing, professional and other fees
|
624,000 | |||||||||||||||
|
Mark-to-market (gain)/loss
|
(488,000 | ) | ||||||||||||||
|
Total
|
136,000 | |||||||||||||||
|
(3) Fenco related sales and marketing expenses
|
112,000 | |||||||||||||||
(4) Intersegment interest income from the Undercar product line segment is $782,000.
(5) Tax effected for Rotating Electrical at 39% tax rate.
(6) 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
|
|
Nine months ended December 31, 2011 (Unaudited)
|
||||||||||||||||
|
Adjusted
|
||||||||||||||||
|
As Reported
|
Rotating
|
|||||||||||||||
|
Rotating
|
Adjustment
|
Electrical
|
||||||||||||||
|
Income statement
|
Electrical
|
(Non-GAAP)
|
(Non-GAAP)
|
|||||||||||||
|
Net sales
|
$ | 128,501,000 | $ | (1,853,000 | ) | (1 | ) | $ | 126,648,000 | |||||||
|
Cost of goods sold
|
88,018,000 | - | 88,018,000 | |||||||||||||
|
Gross profit
|
40,483,000 | (1,853,000 | ) | 38,630,000 | ||||||||||||
|
Gross margin
|
31.5 | % | 30.5 | % | ||||||||||||
|
Operating expenses:
|
||||||||||||||||
|
General and administrative
|
16,809,000 | (4,223,000 | ) | (2 | ) | 12,586,000 | ||||||||||
|
Sales and marketing
|
5,789,000 | (238,000 | ) | (3 | ) | 5,551,000 | ||||||||||
|
Research and development
|
1,270,000 | - | 1,270,000 | |||||||||||||
|
Acquisition costs
|
713,000 | (713,000 | ) | (4 | ) | - | ||||||||||
|
Total operating expenses
|
24,581,000 | (5,174,000 | ) | 19,407,000 | ||||||||||||
|
Operating income
|
15,902,000 | 3,321,000 | 19,223,000 | |||||||||||||
|
Interest expense, net
|
2,272,000 | 1,727,000 | (5 | ) | 3,999,000 |
(B)
|
||||||||||
|
Income before income tax expense
|
13,630,000 | 1,594,000 | 15,224,000 | |||||||||||||
|
Income tax expense
|
5,350,000 | 588,000 | (6 | ) | 5,937,000 |
(B)
|
||||||||||
|
Net income
|
$ | 8,280,000 | $ | 1,006,000 | $ | 9,287,000 |
(A)
|
|||||||||
|
Diluted net income per share
|
$ | 0.75 | ||||||||||||||
|
Weighted average number of shares outstanding:
|
||||||||||||||||
|
Diluted
|
12,459,762 | (7) | ||||||||||||||
|
Depreciation and amortization
|
2,634,000 |
(B)
|
||||||||||||||
|
Adjusted EBITDA - Sum of (A) and (B)
|
$ | 21,857,000 | ||||||||||||||
|
(1) Intersegment revenue, net of cost of goods sold
|
1,853,000 | |||||||||||||||
|
(2) Fenco, financing, professional and other fees
|
2,824,000 | |||||||||||||||
|
Mark-to-market (gain)/loss
|
1,399,000 | |||||||||||||||
|
Total
|
4,223,000 | |||||||||||||||
|
(3) Fenco related sales and marketing expenses
|
238,000 | |||||||||||||||
|
(4) Fenco related acquisition costs
|
713,000 | |||||||||||||||
(5) Intersegment interest income from the Undercar product line segment is $1,727,000
(6) Tax effected for Rotating Electrical at 39% tax rate.
(7) Excludes the impact of 312,873 shares in connection with the consideration for the May 6, 2011 Fenco acquisition.