Motorcar Parts of America, Inc. (Nasdaq:MPAA) today reported record
sales for its fiscal 2018 second quarter and six-month period --
despite widely reported industry softness and associated customer
ordering dynamics, both of which now appear to be reversing.
Net sales for the fiscal 2018 second quarter increased 2.7
percent to $111.8 million from $108.8 million for the same period a
year earlier.
All results labeled as “adjusted” in this press release are
non-GAAP measures as discussed more fully below under the heading
“Use of Non-GAAP Measures.”
Adjusted net sales for the fiscal 2018 second quarter increased
1.7 percent to $114.3 million from $112.4 million a year
earlier. The company’s adjusted sales performance for the
fiscal 2018 second quarter reflects continued strength of its
rotating electrical business, as well as contributions from its
other product lines.
Net income for the fiscal 2018 second quarter was $6.3 million,
or $0.33 per diluted share, compared with $9.1 million, or $0.47
per diluted share, a year ago.
Adjusted net income for the fiscal 2018 second quarter was $9.7
million, or $0.50 per diluted share, compared with $12.4 million,
or $0.64 per diluted share, in the same period a year earlier.
Gross profit for the fiscal 2018 second quarter was $27.2
million compared with $30.7 million a year earlier. Gross
profit as a percentage of net sales for the fiscal 2018 second
quarter was 24.3 percent compared with 28.2 percent a year earlier
– reflecting the impact of return accruals related to new business,
higher returns as a percentage of sales and lower purchasing volume
impacting overhead absorption.
Adjusted gross profit for the fiscal 2018 second quarter was
$32.3 million compared with $34.5 million a year ago.
Adjusted gross profit as a percentage of adjusted net sales for the
three months was 28.2 percent compared with 30.7 percent a year
earlier. The current quarter adjusted gross profit as a
percentage of adjusted net sales was impacted by higher returns as
a percentage of adjusted sales and lower purchasing volume
impacting overhead absorption.
Net sales for the fiscal 2018 six-month period increased 6.5
percent to $206.8 million from $194.2 million a year earlier.
Adjusted net sales for the fiscal 2018 six-month period
increased 1.5 percent to $209.3 million from $206.2 million last
year.
Net income for the fiscal 2018 six-month period was $13.9
million, or $0.72 per diluted share, compared with $16.7 million,
or $0.86 per diluted share, in fiscal 2017.
Adjusted net income for the fiscal 2018 six-month period was
$17.0 million, or $0.88 per diluted share, compared with $22.5
million, or $1.16 per diluted share, in fiscal 2017.
Gross profit for the fiscal 2018 six-month period was $53.0
million compared with $51.0 million a year earlier. Gross profit as
a percentage of net sales for the fiscal 2018 first half was 25.6
percent compared with 26.3 percent a year earlier – reflecting the
impact of return accruals related to new business, higher returns
as a percentage of sales and lower purchasing volume impacting
overhead absorption.
Adjusted gross profit for the fiscal 2018 the six-month period
was $59.4 million compared with $64.8 million a year ago. Adjusted
gross profit as a percentage of adjusted net sales for the six
months was 28.4 percent compared with 31.4 percent a year
earlier. The current six-month period adjusted gross profit
as a percentage of adjusted net sales was impacted by higher
returns as a percentage of adjusted sales and lower purchasing
volume impacting overhead absorption.
“The first half of fiscal 2018 was a challenging period, even
though we achieved market share gains. As widely
reported by industry observers, we are experiencing industry
softness and related headwinds. Nonetheless, we remain
enthusiastic about our longer-term prospects within the $125
billion aftermarket hard parts industry -- supported by organic
growth, product line expansion and complementary acquisition
opportunities,” said Selwyn Joffe, chairman, president and chief
executive officer of Motorcar Parts of America.
Joffe added that sales for the fiscal year 2018 second quarter
were adversely impacted by a general softness in the market, as
indicated above, and by approximately five percent due to certain
customer inventory reduction initiatives.
Joffe noted that adjusted gross margins were negatively affected
by lower purchasing volume impacting overhead absorption and higher
returns as a percentage of adjusted sales related to existing
business. “We expect gross margins will improve as sales
volume increases,” Joffe said.
“Our acquisition in July of D&V Electronics, which designs
and manufactures leading edge tester systems utilized for a variety
of applications, offers an exciting additional market for
accelerating sales of diagnostic equipment related to our current
products and growth of diagnostic equipment for the emerging
electric vehicle market. The sales opportunities for D&V
testing products that directly relate to our existing product line
are significant. We expect to realize substantial growth over
the next few years. In addition, D&V has developed
leading-edge testing capabilities for the key components of
electric and hybrid vehicles. We continue to see significant
interest for our technology from original equipment manufacturers
and Tier One suppliers. In addition, this specialized
business complements our commitment to innovation and customer
support, all of which further distinguishes Motorcar Parts of
America’s position within the non-discretionary automotive parts
market. The outlook for the automotive aftermarket remains
strong, and we remain encouraged by the numerous opportunities for
growth as we harness our distribution relationships, leverage our
scale, global footprint and financial strength to deliver growth
and profits to shareholders,” Joffe added.
“We are encouraged by our recent market share gains and
anticipate further increasing our overall sales volume in the
second half of our fiscal year. As always, we thank our
entire team for their day-in and day-out commitment to excellence
as we continue to build shareholder value,” Joffe said.
Use of Non-GAAP Measures
This press release includes the following non-GAAP measures -
adjusted net sales, adjusted net income (loss), adjusted EBITDA,
adjusted gross profit and adjusted gross margin, which are not
measures of financial performance under GAAP, and should not be
considered as alternatives to net sales, net income (loss), EBITDA,
income from operations, gross profit or gross profit margin as a
measure of financial performance. The Company believes these
non-GAAP measures, when considered together with the corresponding
GAAP measures, provide useful information to investors and
management regarding financial and business trends relating to the
company’s results of operations. However, these non-GAAP
measures have significant limitations in that they do not reflect
all of the costs associated with the operations of the company’s
business as determined in accordance with GAAP. Therefore,
investors should consider non-GAAP measures in addition to, and not
as a substitute for, or superior to, measures of financial
performance in accordance with GAAP. For a reconciliation of
adjusted net sales, adjusted net income (loss), adjusted EBITDA,
adjusted gross profit and adjusted gross margin to their
corresponding GAAP measures, see the financial tables included in
this press release. Also, refer to our Form 8-K to which this
release is attached, and other filings we make with the SEC, for
further information regarding these adjustments.
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 on November 9, 2017
through 8:59 p.m. Pacific time on November 16, 2017 by calling
(855)-859-2056 (domestic) or (404)-537-3406 (international) and
using access code: 99544775.
About Motorcar Parts of America, Inc.
Motorcar Parts of America, Inc. is a
remanufacturer, manufacturer and distributor of automotive
aftermarket parts -- including alternators, starters, wheel bearing
and hub assemblies, brake master cylinders, brake power boosters
and turbochargers utilized in imported and domestic passenger
vehicles, light trucks and heavy-duty applications. In
addition, the company designs and manufactures test equipment for
performance, endurance and production testing of alternators,
starters, electric motors, inverters and belt starter generators
for both the OE and aftermarket. Motorcar Parts of America’s
products are sold to automotive retail outlets and the professional
repair market throughout the United States and Canada, with
facilities located in California, Mexico, Malaysia and China, and
administrative offices located in California, Tennessee, Mexico,
Singapore, Malaysia and Canada. Additional information is
available at www.motorcarparts.com.
The Private Securities Litigation Reform Act of 1995 provides a
“safe harbor” for certain forward-looking statements. The
statements contained in this press release that are not historical
facts are forward-looking statements based on the company’s current
expectations and beliefs concerning future developments and their
potential effects on the company. These forward-looking statements
involve significant risks and uncertainties (some of which are
beyond the control of the company) and are subject to change based
upon various factors. Reference is also made to the Risk
Factors set forth in the company’s Form 10-K Annual Report filed
with the Securities and Exchange Commission (SEC) in June 2017 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)
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MOTORCAR PARTS OF AMERICA, INC. AND
SUBSIDIARIESConsolidated Statements of
Income(Unaudited) |
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|
|
|
Three Months Ended |
|
Six Months Ended |
|
|
September 30, |
|
September 30, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
111,774,000 |
|
$ |
108,836,000 |
|
$ |
206,837,000 |
|
$ |
194,248,000 |
Cost of goods sold |
|
|
84,612,000 |
|
|
78,178,000 |
|
|
153,836,000 |
|
|
143,199,000 |
Gross profit |
|
|
27,162,000 |
|
|
30,658,000 |
|
|
53,001,000 |
|
|
51,049,000 |
Operating
expenses: |
|
|
|
|
|
|
|
|
General
and administrative |
|
|
8,615,000 |
|
|
9,869,000 |
|
|
14,802,000 |
|
|
13,494,000 |
Sales and
marketing |
|
|
3,457,000 |
|
|
2,707,000 |
|
|
6,851,000 |
|
|
5,341,000 |
Research
and development |
|
|
1,240,000 |
|
|
905,000 |
|
|
2,242,000 |
|
|
1,774,000 |
Total operating expenses |
|
|
13,312,000 |
|
|
13,481,000 |
|
|
23,895,000 |
|
|
20,609,000 |
Operating income |
|
|
13,850,000 |
|
|
17,177,000 |
|
|
29,106,000 |
|
|
30,440,000 |
Interest
expense, net |
|
|
3,522,000 |
|
|
3,189,000 |
|
|
6,836,000 |
|
|
6,008,000 |
Income
before income tax expense |
|
|
10,328,000 |
|
|
13,988,000 |
|
|
22,270,000 |
|
|
24,432,000 |
Income
tax expense |
|
|
4,027,000 |
|
|
4,845,000 |
|
|
8,343,000 |
|
|
7,781,000 |
|
|
|
|
|
|
|
|
|
Net
income |
|
$ |
6,301,000 |
|
$ |
9,143,000 |
|
$ |
13,927,000 |
|
$ |
16,651,000 |
|
|
|
|
|
|
|
|
|
Basic net
income per share |
|
$ |
0.34 |
|
$ |
0.49 |
|
$ |
0.75 |
|
$ |
0.90 |
|
|
|
|
|
|
|
|
|
Diluted
net income per share |
|
$ |
0.33 |
|
$ |
0.47 |
|
$ |
0.72 |
|
$ |
0.86 |
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Weighted average number
of shares outstanding: |
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|
|
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|
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Basic |
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|
18,718,709 |
|
|
18,641,324 |
|
|
18,687,179 |
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18,544,118 |
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|
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Diluted |
|
|
19,356,809 |
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|
19,429,390 |
|
|
19,371,144 |
|
|
19,384,668 |
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MOTORCAR PARTS OF AMERICA, INC. AND
SUBSIDIARIESConsolidated Balance
Sheets |
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|
September 30, 2017 |
|
March 31, 2017 |
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ASSETS |
|
(Unaudited) |
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Current
assets: |
|
|
|
|
|
Cash and cash equivalents |
|
$ |
15,090,000 |
|
|
$ |
9,029,000 |
|
|
Short-term investments |
|
|
2,568,000 |
|
|
|
2,140,000 |
|
|
Accounts receivable — net |
|
|
12,393,000 |
|
|
|
26,017,000 |
|
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Inventory — net |
|
|
88,902,000 |
|
|
|
67,516,000 |
|
|
Inventory unreturned |
|
|
7,704,000 |
|
|
|
7,581,000 |
|
|
Prepaid expenses and other current assets |
|
|
17,178,000 |
|
|
|
9,848,000 |
|
|
Total current assets |
|
|
143,835,000 |
|
|
|
122,131,000 |
|
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Plant and equipment — net |
|
|
19,868,000 |
|
|
|
18,437,000 |
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|
Long-term core inventory — net |
|
|
265,564,000 |
|
|
|
262,922,000 |
|
|
Long-term core inventory deposits |
|
|
5,569,000 |
|
|
|
5,569,000 |
|
|
Long-term deferred income taxes |
|
|
14,079,000 |
|
|
|
13,546,000 |
|
|
Goodwill |
|
|
2,551,000 |
|
|
|
2,551,000 |
|
|
Intangible assets — net |
|
|
4,191,000 |
|
|
|
3,993,000 |
|
|
Other assets |
|
|
5,807,000 |
|
|
|
6,990,000 |
|
|
TOTAL ASSETS |
|
$ |
461,464,000 |
|
|
$ |
436,139,000 |
|
|
LIABILITIES AND
SHAREHOLDERS'
EQUITY |
|
|
|
|
Current
liabilities: |
|
|
|
|
Accounts payable |
|
$ |
85,028,000 |
|
|
$ |
85,960,000 |
|
|
Accrued liabilities |
|
|
9,061,000 |
|
|
|
10,077,000 |
|
|
Customer finished goods returns accrual |
|
|
13,421,000 |
|
|
|
17,667,000 |
|
|
Accrued core payment |
|
|
11,360,000 |
|
|
|
11,714,000 |
|
|
Revolving loan |
|
|
36,000,000 |
|
|
|
11,000,000 |
|
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Other current liabilities |
|
|
3,565,000 |
|
|
|
3,300,000 |
|
|
Current portion of term loan |
|
|
3,060,000 |
|
|
|
3,064,000 |
|
|
Total current liabilities |
|
|
161,495,000 |
|
|
|
142,782,000 |
|
|
Term loan, less current portion |
|
|
15,401,000 |
|
|
|
16,935,000 |
|
|
Long-term accrued core payment |
|
|
6,808,000 |
|
|
|
12,349,000 |
|
|
Long-term deferred income taxes |
|
|
205,000 |
|
|
|
180,000 |
|
|
Other liabilities |
|
|
3,459,000 |
|
|
|
15,212,000 |
|
|
Total liabilities |
|
|
187,368,000 |
|
|
|
187,458,000 |
|
|
Commitments and contingencies |
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Shareholders' equity: |
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|
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Preferred stock; par value $.01 per share, 5,000,000 shares
authorized; none issued |
|
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- |
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|
- |
|
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Series A junior participating preferred stock; par value $.01
per share, |
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|
|
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20,000 shares authorized; none issued |
|
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- |
|
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|
- |
|
|
Common stock; par value $.01 per share, 50,000,000 shares
authorized; |
|
|
|
|
19,062,869 and 18,648,854 shares issued and outstanding at
September 30, 2017 and |
|
|
|
|
|
March 31, 2017, respectively |
|
|
191,000 |
|
|
|
186,000 |
|
|
Additional paid-in capital |
|
|
216,176,000 |
|
|
|
205,646,000 |
|
|
Retained earnings |
|
|
64,217,000 |
|
|
|
50,290,000 |
|
|
Accumulated other comprehensive loss |
|
|
(6,488,000 |
) |
|
|
(7,441,000 |
) |
|
Total shareholders' equity |
|
|
274,096,000 |
|
|
|
248,681,000 |
|
|
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
$ |
461,464,000 |
|
|
$ |
436,139,000 |
|
|
|
|
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|
|
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 three and six
months ended September 30, 2017 and 2016. 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.
Income statement information for the three and six months ended
September 30, 2017 and 2016 are as follows:
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Reconciliation of Non-GAAP Financial Measures |
|
|
Exhibit 1 |
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Three Months Ended September 30, |
|
Six Months Ended September 30, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
GAAP
Results: |
|
|
|
|
|
|
|
|
Net
sales |
$ |
111,774,000 |
|
|
$ |
108,836,000 |
|
|
$ |
206,837,000 |
|
|
$ |
194,248,000 |
|
|
Net
income |
|
6,301,000 |
|
|
|
9,143,000 |
|
|
|
13,927,000 |
|
|
|
16,651,000 |
|
|
Diluted
income per share (EPS) |
|
0.33 |
|
|
|
0.47 |
|
|
|
0.72 |
|
|
|
0.86 |
|
|
Gross
margin |
|
24.3 |
% |
|
|
28.2 |
% |
|
|
25.6 |
% |
|
|
26.3 |
% |
|
Non-GAAP
Adjusted Results: |
|
|
|
|
|
|
|
|
Non-GAAP
adjusted net sales |
$ |
114,270,000 |
|
|
$ |
112,383,000 |
|
|
$ |
209,333,000 |
|
|
$ |
206,205,000 |
|
|
Non-GAAP
adjusted net income |
|
9,683,000 |
|
|
|
12,426,000 |
|
|
|
17,031,000 |
|
|
|
22,516,000 |
|
|
Non-GAAP
adjusted diluted earnings per share (EPS) |
|
0.50 |
|
|
|
0.64 |
|
|
|
0.88 |
|
|
|
1.16 |
|
|
Non-GAAP
adjusted gross margin |
|
28.2 |
% |
|
|
30.7 |
% |
|
|
28.4 |
% |
|
|
31.4 |
% |
|
Non-GAAP
adjusted EBITDA |
$ |
20,509,000 |
|
|
$ |
24,470,000 |
|
|
$ |
36,908,000 |
|
|
$ |
44,689,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP Financial Measures |
|
|
Exhibit 2 |
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Six Months Ended September 30, |
|
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
GAAP net sales |
$ |
111,774,000 |
|
$ |
108,836,000 |
|
$ |
206,837,000 |
|
$ |
194,248,000 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
Net
sales |
|
|
|
|
|
|
|
|
|
Initial
return and stock adjustment accruals related to new business |
|
2,496,000 |
|
|
1,315,000 |
|
|
2,496,000 |
|
|
3,168,000 |
|
|
Customer
allowances related to new business |
|
- |
|
|
2,232,000 |
|
|
|
|
8,789,000 |
|
Adjusted net sales |
$ |
114,270,000 |
|
$ |
112,383,000 |
|
$ |
209,333,000 |
|
$ |
206,205,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP Financial Measures |
Exhibit 3 |
|
|
|
|
|
Three Months Ended
September 30, |
|
|
2017 |
|
2016 |
|
|
$ |
|
Per DilutedShare |
|
$ |
|
Per DilutedShare |
GAAP net income |
$ |
6,301,000 |
|
|
$ |
0.33 |
|
|
$ |
9,143,000 |
|
|
$ |
0.47 |
|
Adjustments: |
|
|
|
|
|
|
|
|
Net
sales |
|
|
|
|
|
|
|
|
Initial
return and stock adjustment accruals related to new business |
|
2,496,000 |
|
|
$ |
0.13 |
|
|
|
1,315,000 |
|
|
$ |
0.07 |
|
|
Customer
allowances related to new business |
|
- |
|
|
$ |
- |
|
|
|
2,232,000 |
|
|
$ |
0.11 |
|
|
Cost of
goods sold |
|
|
|
|
|
|
|
|
New
product line start-up and ramp-up costs |
|
- |
|
|
$ |
- |
|
|
|
16,000 |
|
|
$ |
0.00 |
|
|
Lower of
cost or net realizable value revaluation - cores on customers'
shelves andinventory step-up amortization |
|
2,955,000 |
|
|
$ |
0.15 |
|
|
|
475,000 |
|
|
$ |
0.02 |
|
|
Cost of
customer allowances and stock adjustment accruals related to new
business |
|
(362,000 |
) |
|
$ |
(0.02 |
) |
|
|
(213,000 |
) |
|
$ |
(0.01 |
) |
|
Operating expenses |
|
|
|
|
|
|
|
|
Legal,
severance, acquisition, financing, transition and other costs |
|
236,000 |
|
|
$ |
0.01 |
|
|
|
219,000 |
|
|
$ |
0.01 |
|
|
Share-based compensation expenses |
|
910,000 |
|
|
$ |
0.05 |
|
|
|
1,008,000 |
|
|
$ |
0.05 |
|
|
Mark-to-market losses (gains) |
|
(690,000 |
) |
|
$ |
(0.04 |
) |
|
|
1,331,000 |
|
|
$ |
0.07 |
|
|
Tax
effected at 39% tax rate (a) |
|
(2,163,000 |
) |
|
$ |
(0.11 |
) |
|
|
(3,100,000 |
) |
|
$ |
(0.16 |
) |
Adjusted net income |
$ |
9,683,000 |
|
|
$ |
0.50 |
|
|
$ |
12,426,000 |
|
|
$ |
0.64 |
|
|
|
|
|
|
|
|
|
|
(a) Adjusted net income is calculated by applying an income
tax rate of 39%; this rate may differ from the period's actual
income tax rate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP Financial Measures |
Exhibit 4 |
|
|
|
|
|
|
|
Six Months Ended
September 30, |
|
|
|
2017 |
|
2016 |
|
|
|
$ |
|
Per DilutedShare |
|
$ |
|
Per DilutedShare |
|
GAAP net income |
$ |
13,927,000 |
|
|
$ |
0.72 |
|
|
$ |
16,651,000 |
|
|
$ |
0.86 |
|
|
Adjustments: |
|
|
|
|
|
|
|
|
|
Net
sales |
|
|
|
|
|
|
|
|
|
Initial
return and stock adjustment accruals related to new business |
|
2,496,000 |
|
|
$ |
0.13 |
|
|
|
3,168,000 |
|
|
$ |
0.16 |
|
|
|
Customer
allowances related to new business |
|
- |
|
|
$ |
- |
|
|
|
8,789,000 |
|
|
$ |
0.45 |
|
|
|
Cost of
goods sold |
|
|
|
|
|
|
|
|
|
New
product line start-up and ramp-up costs |
|
- |
|
|
$ |
- |
|
|
|
140,000 |
|
|
$ |
0.01 |
|
|
|
Lower of
cost or net realizable value revaluation - cores on customers'
shelves andinventory step-up amortization |
|
4,305,000 |
|
|
$ |
0.22 |
|
|
|
2,193,000 |
|
|
$ |
0.11 |
|
|
|
Cost of
customer allowances and stock adjustment accruals related to new
business |
|
(362,000 |
) |
|
$ |
(0.02 |
) |
|
|
(568,000 |
) |
|
$ |
(0.03 |
) |
|
|
Operating expenses |
|
|
|
|
|
|
|
|
|
Legal,
severance, acquisition, financing, transition and other costs |
|
501,000 |
|
|
$ |
0.03 |
|
|
|
615,000 |
|
|
$ |
0.03 |
|
|
|
Share-based compensation expenses |
|
1,744,000 |
|
|
$ |
0.09 |
|
|
|
1,737,000 |
|
|
$ |
0.09 |
|
|
|
Mark-to-market losses (gains) |
|
(3,035,000 |
) |
|
$ |
(0.16 |
) |
|
|
(3,595,000 |
) |
|
$ |
(0.19 |
) |
|
|
Tax
effected at 39% tax rate (a) |
|
(2,545,000 |
) |
|
$ |
(0.13 |
) |
|
|
(6,614,000 |
) |
|
$ |
(0.34 |
) |
|
Adjusted net income |
$ |
17,031,000 |
|
|
$ |
0.88 |
|
|
$ |
22,516,000 |
|
|
$ |
1.16 |
|
|
|
|
|
|
|
|
|
|
|
|
(a) Adjusted net income is calculated by applying an income
tax rate of 39%; this rate may differ from the period's actual
income tax rate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP Financial Measures |
Exhibit 5 |
|
|
|
|
|
Three Months Ended
September 30, |
|
|
2017 |
|
2016 |
|
|
$ |
|
GrossMargin |
|
$ |
|
GrossMargin |
GAAP gross profit |
$ |
27,162,000 |
|
|
24.3 |
% |
|
$ |
30,658,000 |
|
|
28.2 |
% |
Adjustments: |
|
|
|
|
|
|
|
|
Net
sales |
|
|
|
|
|
|
|
|
Initial
return and stock adjustment accruals related to new business |
|
2,496,000 |
|
|
|
|
|
1,315,000 |
|
|
|
|
Customer
allowances related to new business |
|
- |
|
|
|
|
|
2,232,000 |
|
|
|
|
Cost of
goods sold |
|
|
|
|
|
|
|
|
New
product line start-up and ramp-up costs |
|
- |
|
|
|
|
|
16,000 |
|
|
|
|
Lower of
cost or net realizable value revaluation - cores on customers'
shelves andinventory step-up amortization |
|
2,955,000 |
|
|
|
|
|
475,000 |
|
|
|
|
Cost of
customer allowances and stock adjustment accruals related to new
business |
|
(362,000 |
) |
|
|
|
|
(213,000 |
) |
|
|
Total adjustments |
|
5,089,000 |
|
|
3.9 |
% |
|
|
3,825,000 |
|
|
2.5 |
% |
Adjusted gross profit |
$ |
32,251,000 |
|
|
28.2 |
% |
|
$ |
34,483,000 |
|
|
30.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP Financial Measures |
Exhibit 6 |
|
|
|
|
|
|
|
Six Months Ended
September 30, |
|
|
|
2017 |
|
2016 |
|
|
|
$ |
|
GrossMargin |
|
$ |
|
GrossMargin |
|
GAAP gross profit |
$ |
53,001,000 |
|
|
25.6 |
% |
|
$ |
51,049,000 |
|
|
26.3 |
% |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
Net
sales |
|
|
|
|
|
|
|
|
|
Initial
return and stock adjustment accruals related to new business |
|
2,496,000 |
|
|
|
|
|
3,168,000 |
|
|
|
|
|
Customer
allowances related to new business |
|
- |
|
|
|
|
|
8,789,000 |
|
|
|
|
|
Cost of
goods sold |
|
|
|
|
|
|
|
|
|
New
product line start-up and ramp-up costs |
|
- |
|
|
|
|
|
140,000 |
|
|
|
|
|
Lower of
cost or net realizable value revaluation - cores on customers'
shelves andinventory step-up amortization |
|
4,305,000 |
|
|
|
|
|
2,193,000 |
|
|
|
|
|
Cost of
customer allowances and stock adjustment accruals related to new
business |
|
(362,000 |
) |
|
|
|
|
(568,000 |
) |
|
|
|
Total adjustments |
|
6,439,000 |
|
|
2.8 |
% |
|
|
13,722,000 |
|
|
5.1 |
% |
|
Adjusted gross profit |
$ |
59,440,000 |
|
|
28.4 |
% |
|
$ |
64,771,000 |
|
|
31.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP Financial Measures |
|
|
Exhibit 7 |
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Six Months Ended September 30, |
|
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
GAAP net income |
$ |
6,301,000 |
|
|
$ |
9,143,000 |
|
|
$ |
13,927,000 |
|
|
$ |
16,651,000 |
|
|
Interest expense, net |
|
3,522,000 |
|
|
|
3,189,000 |
|
|
|
6,836,000 |
|
|
|
6,008,000 |
|
|
Income tax expense |
|
4,027,000 |
|
|
|
4,845,000 |
|
|
|
8,343,000 |
|
|
|
7,781,000 |
|
|
Depreciation and amortization |
|
1,114,000 |
|
|
|
910,000 |
|
|
|
2,153,000 |
|
|
|
1,770,000 |
|
|
EBITDA |
$ |
14,964,000 |
|
|
$ |
18,087,000 |
|
|
$ |
31,259,000 |
|
|
$ |
32,210,000 |
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
|
|
Net
sales |
|
|
|
|
|
|
|
|
|
Initial
return and stock adjustment accruals related to new business |
|
2,496,000 |
|
|
|
1,315,000 |
|
|
|
2,496,000 |
|
|
|
3,168,000 |
|
|
|
Customer
allowances related to new business |
|
- |
|
|
|
2,232,000 |
|
|
|
- |
|
|
|
8,789,000 |
|
|
|
Cost of
goods sold |
|
|
|
|
|
- |
|
|
|
|
|
New
product line start-up and ramp-up costs |
|
- |
|
|
|
16,000 |
|
|
|
- |
|
|
|
140,000 |
|
|
|
Lower of
cost or net realizable value revaluation - cores on customers'
shelves andinventory step-up amortization |
|
2,955,000 |
|
|
|
475,000 |
|
|
|
4,305,000 |
|
|
|
2,193,000 |
|
|
|
Cost of
customer allowances and stock adjustment accruals related to new
business |
|
(362,000 |
) |
|
|
(213,000 |
) |
|
|
(362,000 |
) |
|
|
(568,000 |
) |
|
|
Operating expenses |
|
|
|
|
|
- |
|
|
|
|
|
Legal,
severance, acquisition, financing, transition and other costs |
|
236,000 |
|
|
|
219,000 |
|
|
|
501,000 |
|
|
|
615,000 |
|
|
|
Share-based compensation expenses |
|
910,000 |
|
|
|
1,008,000 |
|
|
|
1,744,000 |
|
|
|
1,737,000 |
|
|
|
Mark-to-market losses (gains) |
|
(690,000 |
) |
|
|
1,331,000 |
|
|
|
(3,035,000 |
) |
|
|
(3,595,000 |
) |
|
Adjusted EBITDA |
$ |
20,509,000 |
|
|
$ |
24,470,000 |
|
|
$ |
36,908,000 |
|
|
$ |
44,689,000 |
|
|
|
|
|
|
|
|
|
|
|
|
CONTACT:
Gary S. Maier
(310) 471-1288
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