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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Motorcar Parts and Associates Inc | NASDAQ:MPAA | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.11 | 2.09% | 5.38 | 5.00 | 7.92 | 5.47 | 5.14 | 5.20 | 216,364 | 00:59:59 |
☑ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
|
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
|
New York
|
11-2153962
|
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
|
2929 California Street, Torrance, California
|
90503
|
|
(Address of principal executive offices)
|
(Zip Code)
|
Large accelerated filer ☐
|
Accelerated filer ☑
|
||
Non-accelerated filer ☐
|
(Do not check if a smaller reporting company)
|
Smaller reporting company ☐
|
|
Emerging growth company ☐
|
PART I — FINANCIAL INFORMATION | |||
4
|
|||
4
|
|||
5
|
|||
6
|
|||
7
|
|||
8
|
|||
22
|
|||
32
|
|||
32
|
|||
PART II — OTHER INFORMATION | |||
34
|
|||
34
|
|||
34
|
|||
35
|
September 30,2017
|
March 31, 2017
|
|||||||
ASSETS
|
(Unaudited)
|
|||||||
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
|
||||||
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
|
||||||
Plant and equipment — net
|
19,868,000
|
18,437,000
|
||||||
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
|
||||||
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
|
||||||||
Shareholders’ equity:
|
||||||||
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
|
-
|
-
|
||||||
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
|
Three Months Ended
September 30,
|
Six Months Ended
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
|
||||||||
Weighted average number of shares outstanding:
|
||||||||||||||||
Basic
|
18,718,709
|
18,641,324
|
18,687,179
|
18,544,118
|
||||||||||||
Diluted
|
19,356,809
|
19,429,390
|
19,371,144
|
19,384,668
|
Three Months Ended
September 30,
|
Six Months Ended
September 30,
|
|||||||||||||||
2017
|
2016
|
2017
|
2016
|
|||||||||||||
Net income
|
$
|
6,301,000
|
$
|
9,143,000
|
$
|
13,927,000
|
$
|
16,651,000
|
||||||||
Other comprehensive income (loss), net of tax:
|
||||||||||||||||
Unrealized gain on short-term investments (net of tax of $40,000, $44,000, $78,000, and $59,000)
|
60,000
|
66,000
|
116,000
|
88,000
|
||||||||||||
Foreign currency translation gain (loss)
|
608,000
|
(807,000
|
)
|
837,000
|
(1,342,000
|
)
|
||||||||||
Total other comprehensive gain (loss), net of tax
|
668,000
|
(741,000
|
)
|
953,000
|
(1,254,000
|
)
|
||||||||||
Comprehensive income
|
$
|
6,969,000
|
$
|
8,402,000
|
$
|
14,880,000
|
$
|
15,397,000
|
Six Months Ended
September 30,
|
||||||||
Cash flows from operating activities:
|
2017
|
2016
|
||||||
Net income
|
$
|
13,927,000
|
$
|
16,651,000
|
||||
Adjustments to reconcile net income to net cash used in operating activities:
|
||||||||
Depreciation
|
1,828,000
|
1,480,000
|
||||||
Amortization of intangible assets
|
325,000
|
290,000
|
||||||
Amortization of debt issuance costs
|
426,000
|
355,000
|
||||||
Amortization of interest on accrued core payments
|
269,000
|
370,000
|
||||||
Gain due to change in fair value of the warrant liability
|
(2,313,000
|
)
|
(4,765,000
|
)
|
||||
Gain due to change in fair value of the contingent consideration
|
-
|
(16,000
|
)
|
|||||
Net provision for inventory reserves
|
3,258,000
|
1,020,000
|
||||||
Net provision for customer payment discrepancies
|
604,000
|
7,000
|
||||||
Net recovery of doubtful accounts
|
(2,000
|
)
|
(12,000
|
)
|
||||
Deferred income taxes
|
(433,000
|
)
|
(1,167,000
|
)
|
||||
Share-based compensation expense
|
1,744,000
|
1,737,000
|
||||||
Loss on disposal of plant and equipment
|
7,000
|
1,000
|
||||||
Changes in operating assets and liabilities, net of effects of acquisitions:
|
||||||||
Accounts receivable
|
14,683,000
|
(7,493,000
|
)
|
|||||
Inventory
|
(18,718,000
|
)
|
(14,305,000
|
)
|
||||
Inventory unreturned
|
(123,000
|
)
|
292,000
|
|||||
Prepaid expenses and other current assets
|
(6,093,000
|
)
|
(1,936,000
|
)
|
||||
Other assets
|
1,198,000
|
(4,549,000
|
)
|
|||||
Accounts payable and accrued liabilities
|
(3,465,000
|
)
|
288,000
|
|||||
Customer finished goods returns accrual
|
(4,246,000
|
)
|
(6,615,000
|
)
|
||||
Long-term core inventory
|
(5,155,000
|
)
|
(10,643,000
|
)
|
||||
Accrued core payments
|
(6,164,000
|
)
|
2,261,000
|
|||||
Other liabilities
|
295,000
|
4,433,000
|
||||||
Net cash used in operating activities
|
(8,148,000
|
)
|
(22,316,000
|
)
|
||||
Cash flows from investing activities:
|
||||||||
Purchase of plant and equipment
|
(2,460,000
|
)
|
(2,594,000
|
)
|
||||
Purchase of business, net of cash acquired
|
(4,974,000
|
)
|
(600,000
|
)
|
||||
Change in short-term investments
|
(226,000
|
)
|
(270,000
|
)
|
||||
Net cash used in investing activities
|
(7,660,000
|
)
|
(3,464,000
|
)
|
||||
Cash flows from financing activities:
|
||||||||
Borrowings under revolving loan
|
52,000,000
|
24,000,000
|
||||||
Repayments of revolving loan
|
(27,000,000
|
)
|
(12,000,000
|
)
|
||||
Repayments of term loan
|
(1,563,000
|
)
|
(1,563,000
|
)
|
||||
Payments for debt issuance costs
|
(443,000
|
)
|
(444,000
|
)
|
||||
Payments on capital lease obligations
|
(392,000
|
)
|
(221,000
|
)
|
||||
Payment of contingent consideration
|
-
|
(314,000
|
)
|
|||||
Exercise of stock options
|
295,000
|
1,047,000
|
||||||
Cash used to net share settle equity awards
|
(594,000
|
)
|
(1,057,000
|
)
|
||||
Settlement of warrant
|
4,000,000
|
-
|
||||||
Repurchase of common stock, including fees
|
(4,476,000
|
)
|
-
|
|||||
Net cash provided by financing activities
|
21,827,000
|
9,448,000
|
||||||
Effect of exchange rate changes on cash and cash equivalents
|
42,000
|
(113,000
|
)
|
|||||
Net increase (decrease) in cash and cash equivalents
|
6,061,000
|
(16,445,000
|
)
|
|||||
Cash and cash equivalents — Beginning of period
|
9,029,000
|
21,897,000
|
||||||
Cash and cash equivalents — End of period
|
$
|
15,090,000
|
$
|
5,452,000
|
||||
Supplemental disclosures of cash flow information:
|
||||||||
Cash paid during the period for:
|
||||||||
Interest, net
|
$
|
6,121,000
|
$
|
5,224,000
|
||||
Income taxes, net of refunds
|
11,672,000
|
5,063,000
|
||||||
Non-cash investing and financing activities:
|
||||||||
Plant and equipment acquired under capital lease
|
$
|
498,000
|
$
|
312,000
|
Six Months Ended
September 30,
|
||||||||
2017
|
2016
|
|||||||
Balance at beginning of period
|
$
|
2,551,000
|
$
|
2,053,000
|
||||
Goodwill acquired
|
-
|
423,000
|
||||||
Translation adjustment
|
-
|
-
|
||||||
Impairment
|
-
|
-
|
||||||
Balance at end of period
|
$
|
2,551,000
|
$
|
2,476,000
|
September 30, 2017
|
March 31, 2017
|
||||||||||||||||
|
Weighted
Average
Amortization
Period
|
Gross Carrying
Value
|
Accumulated
Amortization
|
Gross Carrying
Value
|
Accumulated
Amortization
|
||||||||||||
Intangible assets subject to amortization
|
|||||||||||||||||
Trademarks
|
9 years
|
$
|
903,000
|
$
|
240,000
|
$
|
705,000
|
$
|
191,000
|
||||||||
Customer relationships
|
13 years
|
5,900,000
|
2,679,000
|
5,900,000
|
2,421,000
|
||||||||||||
Developed technology
|
3 years
|
325,000
|
18,000
|
-
|
-
|
||||||||||||
Total
|
$
|
7,128,000
|
$
|
2,937,000
|
$
|
6,605,000
|
$
|
2,612,000
|
Three Months Ended
September 30,
|
Six Months Ended
September 30,
|
|||||||||||||||
2017
|
2016
|
2017
|
2016
|
|||||||||||||
Amortization expense
|
$
|
180,000
|
$
|
145,000
|
$
|
325,000
|
$
|
290,000
|
Year Ending March 31,
|
||||
2018 - remaining six months
|
$
|
394,000
|
||
2019
|
787,000
|
|||
2020
|
721,000
|
|||
2021
|
616,000
|
|||
2022
|
580,000
|
|||
Thereafter
|
1,093,000
|
|||
Total
|
$
|
4,191,000
|
September 30, 2017
|
March 31, 2017
|
|||||||
Accounts receivable — trade
|
$
|
80,510,000
|
$
|
76,902,000
|
||||
Allowance for bad debts
|
(4,142,000
|
)
|
(4,140,000
|
)
|
||||
Customer allowances earned
|
(11,558,000
|
)
|
(7,880,000
|
)
|
||||
Customer payment discrepancies
|
(944,000
|
)
|
(751,000
|
)
|
||||
Customer returns RGA issued
|
(17,882,000
|
)
|
(12,710,000
|
)
|
||||
Customer core returns accruals
|
(33,591,000
|
)
|
(25,404,000
|
)
|
||||
Less: total accounts receivable offset accounts
|
(68,117,000
|
)
|
(50,885,000
|
)
|
||||
Total accounts receivable — net
|
$
|
12,393,000
|
$
|
26,017,000
|
Three Months Ended
September 30,
|
Six Months Ended
September 30,
|
|||||||||||||||
2017
|
2016
|
2017
|
2016
|
|||||||||||||
Balance at beginning of period
|
$
|
12,849,000
|
$
|
11,559,000
|
$
|
14,286,000
|
$
|
10,845,000
|
||||||||
Charged to expense/additions
|
29,359,000
|
28,179,000
|
51,565,000
|
50,873,000
|
||||||||||||
Amounts processed
|
(27,409,000
|
)
|
(26,031,000
|
)
|
(51,052,000
|
)
|
(48,011,000
|
)
|
||||||||
Balance at end of period
|
$
|
14,799,000
|
$
|
13,707,000
|
$
|
14,799,000
|
$
|
13,707,000
|
September 30, 2017
|
March 31, 2017
|
|||||||
Non-core inventory
|
||||||||
Raw materials
|
$
|
28,335,000
|
$
|
21,515,000
|
||||
Work-in-process
|
1,751,000
|
641,000
|
||||||
Finished goods
|
62,393,000
|
48,337,000
|
||||||
92,479,000
|
70,493,000
|
|||||||
Less allowance for excess and obsolete inventory
|
(3,577,000
|
)
|
(2,977,000
|
)
|
||||
Total
|
$
|
88,902,000
|
$
|
67,516,000
|
||||
Inventory unreturned
|
$
|
7,704,000
|
$
|
7,581,000
|
||||
Long-term core inventory
|
||||||||
Used cores held at the Company’s facilities
|
$
|
40,150,000
|
$
|
38,713,000
|
||||
Used cores expected to be returned by customers
|
16,533,000
|
11,752,000
|
||||||
Remanufactured cores held in finished goods
|
34,688,000
|
27,667,000
|
||||||
Remanufactured cores held at customers’ locations (1)
|
176,479,000
|
185,938,000
|
||||||
|
267,850,000
|
264,070,000
|
||||||
Less allowance for excess and obsolete inventory
|
(2,286,000
|
)
|
(1,148,000
|
)
|
||||
Total
|
$
|
265,564,000
|
$
|
262,922,000
|
||||
Long-term core inventory deposits
|
$
|
5,569,000
|
$
|
5,569,000
|
(1) |
Remanufactured cores held at customers’ locations represent the core portion of the Company’s customers’ finished goods at the Company’s customers’ locations.
|
Three Months Ended
September 30,
|
Six Months Ended
September 30,
|
|||||||||||||||
Sales
|
2017
|
2016
|
2017
|
2016
|
||||||||||||
Customer A
|
48
|
%
|
45
|
%
|
44
|
%
|
48
|
%
|
||||||||
Customer B
|
25
|
%
|
21
|
%
|
25
|
%
|
18
|
%
|
||||||||
Customer C
|
14
|
%
|
19
|
%
|
15
|
%
|
19
|
%
|
||||||||
Customer D
|
3
|
%
|
4
|
%
|
5
|
%
|
4
|
%
|
Accounts receivable - trade
|
September 30, 2017
|
March 31, 2017
|
||||||
Customer A
|
31
|
%
|
33
|
%
|
||||
Customer B
|
15
|
%
|
18
|
%
|
||||
Customer C
|
17
|
%
|
12
|
%
|
||||
Customer D
|
17
|
%
|
16
|
%
|
Three Months Ended
September 30,
|
Six Months Ended
September 30,
|
|||||||||||||||
2017
|
2016
|
2017
|
2016
|
|||||||||||||
Rotating electrical products
|
76
|
%
|
80
|
%
|
77
|
%
|
76
|
%
|
||||||||
Wheel hub products
|
18
|
%
|
20
|
%
|
18
|
%
|
21
|
%
|
||||||||
Brake master cylinders products
|
3
|
%
|
3
|
%
|
3
|
%
|
4
|
%
|
||||||||
Other products
|
3
|
%
|
(3
|
)%
|
2
|
%
|
(1
|
)%
|
||||||||
100
|
%
|
100
|
%
|
100
|
%
|
100
|
%
|
September 30, 2017
|
March 31, 2017
|
|||||||
Principal amount of term loan
|
$
|
18,750,000
|
$
|
20,312,000
|
||||
Unamortized financing fees
|
(289,000
|
)
|
(313,000
|
)
|
||||
Net carrying amount of term loan
|
18,461,000
|
19,999,000
|
||||||
Less current portion of term loan
|
(3,060,000
|
)
|
(3,064,000
|
)
|
||||
Long-term portion of term loan
|
$
|
15,401,000
|
$
|
16,935,000
|
Year Ending March 31,
|
||||
2018 - remaining six months
|
1,562,000
|
|||
2019
|
3,125,000
|
|||
2020
|
3,125,000
|
|||
2021
|
10,938,000
|
|||
Total payments
|
$
|
18,750,000
|
Six Months Ended
September 30,
|
||||||||
2017
|
2016
|
|||||||
Receivables discounted
|
$
|
175,209,000
|
$
|
167,670,000
|
||||
Weighted average days
|
341
|
341
|
||||||
Annualized weighted average discount rate
|
3.1
|
%
|
2.8
|
%
|
||||
Amount of discount as interest expense
|
$
|
5,090,000
|
$
|
4,408,000
|
Three Months Ended
September 30,
|
Six Months Ended
September 30,
|
|||||||||||||||
2017
|
2016
|
2017
|
2016
|
|||||||||||||
Net income
|
$
|
6,301,000
|
$
|
9,143,000
|
$
|
13,927,000
|
$
|
16,651,000
|
||||||||
Basic shares
|
18,718,709
|
18,641,324
|
18,687,179
|
18,544,118
|
||||||||||||
Effect of potentially dilutive securities
|
638,100
|
788,066
|
683,965
|
840,550
|
||||||||||||
Diluted shares
|
19,356,809
|
19,429,390
|
19,371,144
|
19,384,668
|
||||||||||||
Net income per share:
|
||||||||||||||||
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
|
September 30, 2017
|
March 31, 2017
|
|||||||||||||||||||||||||||||||
Fair Value Measurements
Using Inputs Considered as
|
Fair Value Measurements
Using Inputs Considered as
|
|||||||||||||||||||||||||||||||
Fair Value
|
Level 1
|
Level 2
|
Level 3
|
Fair Value
|
Level 1
|
Level 2
|
Level 3
|
|||||||||||||||||||||||||
Assets
|
||||||||||||||||||||||||||||||||
Short-term investments
|
||||||||||||||||||||||||||||||||
Mutual funds
|
$
|
2,568,000
|
$
|
2,568,000
|
-
|
-
|
$
|
2,140,000
|
$
|
2,140,000
|
-
|
-
|
||||||||||||||||||||
Prepaid expenses and other current assets
|
||||||||||||||||||||||||||||||||
Forward foreign currency exchange contracts
|
1,149,000
|
-
|
$
|
1,149,000
|
-
|
427,000
|
-
|
$
|
427,000
|
-
|
||||||||||||||||||||||
Liabilities
|
||||||||||||||||||||||||||||||||
Other current liabilities
|
||||||||||||||||||||||||||||||||
Deferred compensation
|
2,568,000
|
2,568,000
|
-
|
-
|
2,140,000
|
2,140,000
|
-
|
-
|
||||||||||||||||||||||||
Other liabilities
|
||||||||||||||||||||||||||||||||
Warrant liability
|
-
|
-
|
-
|
-
|
11,879,000
|
-
|
-
|
$
|
11,879,000
|
Three Months Ended September 30,
|
Six Months Ended September 30,
|
|||||||||||||||||||||||||||||||
2017
|
2016
|
2017
|
2016
|
|||||||||||||||||||||||||||||
Supplier
Warrant
|
Contingent
Consideration
|
Supplier
Warrant
|
Contingent
Consideration
|
Supplier
Warrant
|
Contingent
Consideration
|
Supplier
Warrant
|
Contingent
Consideration
|
|||||||||||||||||||||||||
Beginning balance
|
$
|
10,586,000
|
$
|
-
|
$
|
10,054,000
|
$
|
314,000
|
$
|
11,879,000
|
$
|
-
|
$
|
15,643,000
|
$
|
330,000
|
||||||||||||||||
Newly issued
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||
Total (gain) loss included in net income (loss)
|
(1,020,000
|
)
|
-
|
824,000
|
-
|
(2,313,000
|
)
|
-
|
(4,765,000
|
)
|
(16,000
|
)
|
||||||||||||||||||||
Exercises/settlements (1)
|
(9,566,000
|
)
|
-
|
-
|
(314,000
|
)
|
(9,566,000
|
)
|
-
|
-
|
(314,000
|
)
|
||||||||||||||||||||
Net transfers in (out) of Level 3
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||
Ending balance
|
$
|
-
|
$
|
-
|
$
|
10,878,000
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
10,878,000
|
$
|
-
|
(1) |
Represents the fair value of the Supplier Warrant as of the exercise date (see Note 8).
|
Six Months Ended
September 30,
|
||||||||
2017
|
2016
|
|||||||
Weighted average risk free interest rate
|
1.90
|
%
|
1.38
|
%
|
||||
Weighted average expected holding period (years)
|
5.82
|
5.84
|
||||||
Weighted average expected volatility
|
47.36
|
%
|
47.42
|
%
|
||||
Weighted average expected dividend yield
|
-
|
-
|
||||||
Weighted average fair value of options granted
|
$
|
12.69
|
$
|
13.07
|
Number of
Shares
|
Weighted Average
Exercise Price
|
|||||||
Outstanding at March 31, 2017
|
1,036,359
|
$
|
14.92
|
|||||
Granted
|
163,100
|
$
|
27.40
|
|||||
Exercised
|
(28,951
|
)
|
$
|
10.15
|
||||
Forfeited
|
(1,000
|
)
|
$
|
29.66
|
||||
Outstanding at September 30, 2017
|
1,169,508
|
$
|
16.77
|
Number of
Shares
|
Weighted Average
Grant Date Fair
Value
|
|||||||
Non-vested at March 31, 2017
|
126,277
|
$
|
28.26
|
|||||
Granted
|
60,000
|
$
|
27.40
|
|||||
Vested
|
(56,909
|
)
|
$
|
26.89
|
||||
Forfeited
|
-
|
$
|
-
|
|||||
Non-vested at September 30, 2017
|
129,368
|
$
|
28.46
|
Three Months Ended September 30, 2017
|
Three Months Ended September 30, 2016
|
|||||||||||||||||||||||
Unrealized
Gain
|
Foreign
Currency
|
Total
|
Unrealized
Gain (Loss)
|
Foreign
Currency
|
Total
|
|||||||||||||||||||
Balance at beginning of period
|
$
|
584,000
|
$
|
(7,740,000
|
)
|
$
|
(7,156,000
|
)
|
$
|
354,000
|
$
|
(5,719,000
|
)
|
$
|
(5,365,000
|
)
|
||||||||
Other comprehensive income (loss), net of tax
|
60,000
|
608,000
|
668,000
|
66,000
|
(807,000
|
)
|
(741,000
|
)
|
||||||||||||||||
Amounts reclassified from accumulated other comprehensive loss, net of tax
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Balance at end of period
|
$
|
644,000
|
$
|
(7,132,000
|
)
|
$
|
(6,488,000
|
)
|
$
|
420,000
|
$
|
(6,526,000
|
)
|
$
|
(6,106,000
|
)
|
Six Months Ended September 30, 2017
|
Six Months Ended September 30, 2016
|
|||||||||||||||||||||||
Unrealized
Gain
|
Foreign
Currency
|
Total
|
Unrealized
Gain (Loss)
|
Foreign
Currency
|
Total
|
|||||||||||||||||||
Balance at beginning of period
|
$
|
528,000
|
$
|
(7,969,000
|
)
|
$
|
(7,441,000
|
)
|
$
|
332,000
|
$
|
(5,184,000
|
)
|
$
|
(4,852,000
|
)
|
||||||||
Other comprehensive income (loss), net of tax
|
116,000
|
837,000
|
953,000
|
88,000
|
(1,342,000
|
)
|
(1,254,000
|
)
|
||||||||||||||||
Amounts reclassified from accumulated other comprehensive loss, net of tax
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Balance at end of period
|
$
|
644,000
|
$
|
(7,132,000
|
)
|
$
|
(6,488,000
|
)
|
$
|
420,000
|
$
|
(6,526,000
|
)
|
$
|
(6,106,000
|
)
|
Three Months Ended
September 30,
|
||||||||
2017
|
2016
|
|||||||
Gross profit percentage
|
24.3
|
%
|
28.2
|
%
|
||||
Cash flow used in operations
|
$
|
(7,504,000
|
)
|
$
|
(8,477,000
|
)
|
||
Finished goods turnover (annualized) (1)
|
5.4
|
5.9
|
(1) |
Annualized finished goods turnover for the fiscal quarter is calculated by multiplying cost of goods sold for the quarter by 4 and dividing the result by the average between beginning and ending non-core finished goods inventory values for the fiscal quarter. We believe this provides a useful measure of our ability to turn our inventory into revenues.
|
Three Months Ended
September 30,
|
||||||||
2017
|
2016
|
|||||||
Net sales
|
$
|
111,774,000
|
$
|
108,836,000
|
||||
Cost of goods sold
|
84,612,000
|
78,178,000
|
||||||
Gross profit
|
27,162,000
|
30,658,000
|
||||||
Gross profit percentage
|
24.3
|
%
|
28.2
|
%
|
Three Months Ended
September 30,
|
||||||||
2017
|
2016
|
|||||||
General and administrative
|
$
|
8,615,000
|
$
|
9,869,000
|
||||
Sales and marketing
|
3,457,000
|
2,707,000
|
||||||
Research and development
|
1,240,000
|
905,000
|
||||||
Percent of net sales
|
||||||||
General and administrative
|
7.7
|
%
|
9.1
|
%
|
||||
Sales and marketing
|
3.1
|
%
|
2.5
|
%
|
||||
Research and development
|
1.1
|
%
|
0.8
|
%
|
Six Months Ended
September 30,
|
||||||||
2017
|
2016
|
|||||||
Gross profit percentage
|
25.6
|
%
|
26.3
|
%
|
||||
Cash flow used in operations
|
$
|
(8,148,000
|
)
|
$
|
(22,316,000
|
)
|
||
Finished goods turnover (annualized) (1)
|
5.6
|
6.0
|
(1) |
Annualized finished goods turnover for the fiscal period is calculated by multiplying cost of goods sold for the period by 2 and dividing the result by the average between beginning and ending non-core finished goods inventory values for the fiscal period. We believe this provides a useful measure of our ability to turn our inventory into revenues.
|
Six Months Ended
September 30,
|
||||||||
2017
|
2016
|
|||||||
Net sales
|
$
|
206,837,000
|
$
|
194,248,000
|
||||
Cost of goods sold
|
153,836,000
|
143,199,000
|
||||||
Gross profit
|
53,001,000
|
51,049,000
|
||||||
Gross profit percentage
|
25.6
|
%
|
26.3
|
%
|
Six Months Ended
September 30,
|
||||||||
2017
|
2016
|
|||||||
General and administrative
|
$
|
14,802,000
|
$
|
13,494,000
|
||||
Sales and marketing
|
6,851,000
|
5,341,000
|
||||||
Research and development
|
2,242,000
|
1,774,000
|
||||||
Percent of net sales
|
||||||||
General and administrative
|
7.2
|
%
|
6.9
|
%
|
||||
Sales and marketing
|
3.3
|
%
|
2.7
|
%
|
||||
Research and development
|
1.1
|
%
|
0.9
|
%
|
Six Months Ended
September 30,
|
||||||||
2017
|
2016
|
|||||||
Cash provided by (used in):
|
||||||||
Operating activities
|
$
|
(8,148,000
|
)
|
$
|
(22,316,000
|
)
|
||
Investing activities
|
(7,660,000
|
)
|
(3,464,000
|
)
|
||||
Financing activities
|
21,827,000
|
9,448,000
|
||||||
Effect of exchange rates on cash and cash equivalents
|
42,000
|
(113,000
|
)
|
|||||
Net increase (decrease) in cash and cash equivalents
|
$
|
6,061,000
|
$
|
(16,445,000
|
)
|
|||
Additional selected cash flow data:
|
||||||||
Depreciation and amortization
|
$
|
2,153,000
|
$
|
1,770,000
|
||||
Capital expenditures
|
2,460,000
|
2,594,000
|
Calculation as of
September 30, 2017
|
Financial covenants
required under the
Credit Facility
|
|||||||
Maximum senior leverage ratio
|
0.58
|
2.50
|
||||||
Minimum fixed charge coverage ratio
|
1.79
|
1.15
|
Six Months Ended
September 30,
|
||||||||
2017
|
2016
|
|||||||
Receivables discounted
|
$
|
175,209,000
|
$
|
167,670,000
|
||||
Weighted average days
|
341
|
341
|
||||||
Annualized weighted average discount rate
|
3.1
|
%
|
2.8
|
%
|
||||
Amount of discount as interest expense
|
$
|
5,090,000
|
$
|
4,408,000
|
1. |
Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
|
2. |
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and
|
3. |
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
|
Periods
|
Total Number of
Shares Purchased
|
Average Price
Paid Per Share
|
Total Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Programs
|
Approximate
Dollar Value of
Shares That May
Yet Be Purchased
Under the Plans
or Programs (1)
|
||||||||||
July 1 - July 31, 2017:
|
||||||||||||||
Open market and privately negotiated purchases
|
-
|
$
|
-
|
-
|
$
|
10,642,000
|
||||||||
August 1 - August 31, 2017:
|
||||||||||||||
Open market and privately negotiated purchases
|
97,398
|
$
|
25.64
|
97,398
|
8,145,000
|
|||||||||
September 1 - September 30, 2017:
|
||||||||||||||
Open market and privately negotiated purchases
|
-
|
$
|
-
|
-
|
8,145,000
|
|||||||||
Total
|
97,398
|
97,398
|
$
|
8,145,000
|
(1) |
As of September 30, 2017, $6,855,000 of the $15,000,000 had been utilized and $8,145,000 remained available to repurchase shares under the authorized share repurchase program. We retired the 97,398 shares repurchased under this program during the three months ended September 30, 2017. Our share repurchase program does not obligate us to acquire any specific number of shares and shares may be repurchased in privately negotiated and/or open market transactions.
|
(a) |
Exhibits:
|
Number
|
Description of Exhibit
|
Method of Filing
|
||
3.1
|
Certificate of Incorporation of the Company
|
Incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form SB-2 declared effective on March 22, 1994 (the “1994 Registration Statement”).
|
||
3.2
|
Amendment to Certificate of Incorporation of the Company
|
Incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form S-1 (No. 33-97498) declared effective on November 14, 1995.
|
||
3.3
|
Amendment to Certificate of Incorporation of the Company
|
Incorporated by reference to Exhibit 3.3 to the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 1997.
|
||
3.4
|
Amendment to Certificate of Incorporation of the Company
|
Incorporated by reference to Exhibit 3.4 to the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 1998 (the “1998 Form 10-K”).
|
||
Amendment to Certificate of Incorporation of the Company
|
Incorporated by reference to Exhibit C to the Company’s proxy statement on Schedule 14A filed with the SEC on November 25, 2003.
|
|||
Amended and Restated By-Laws of Motorcar Parts of America, Inc.
|
Incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed on August 24, 2010.
|
|||
Certificate of Amendment of the Certificate of Incorporation of the Company
|
Incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed on April 17, 2014.
|
|||
Amendment to the Amended and Restated By-Laws of Motorcar Parts of America, Inc., as adopted on June 9, 2016
|
Incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed on June 14, 2016.
|
|||
Amendment to the Amended and Restated By-Laws of the Company
|
Incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed on February 22, 2017.
|
|||
2003 Long Term Incentive Plan
|
Incorporated by reference to Exhibit 4.9 to the Company’s Registration Statement on Form S-8 filed with the SEC on April 2, 2004.
|
|||
2004 Non-Employee Director Stock Option Plan
|
Incorporated by reference to Appendix A to the Proxy Statement on Schedule 14A for the 2004 Annual Shareholders Meeting.
|
|||
2010 Incentive Award Plan
|
Incorporated by reference to Appendix A to the Proxy Statement on Schedule 14A filed on December 15, 2010.
|
|||
Amended and Restated 2010 Incentive Award Plan
|
Incorporated by reference to Appendix A to the Proxy Statement on Schedule 14A filed on March 5, 2013.
|
Number
|
Description of Exhibit
|
Method of Filing
|
||
Second Amended and Restated 2010 Incentive Award Plan
|
Incorporated by reference to Appendix A to the Proxy Statement on Schedule 14A filed on March 3, 2014.
|
|||
2014 Non-Employee Director Incentive Award Plan
|
Incorporated by reference to Appendix B to the Proxy Statement on Schedule 14A filed on March 3, 2014.
|
|||
Fifth Amendment to Loan Agreement, dated as of July 18, 2017, among Motorcar Parts of America, Inc., each lender from time to time party thereto and PNC Bank, National Association, as administrative agent
|
Incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on July 24, 2017.
|
|||
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002
|
Filed herewith.
|
|||
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002
|
Filed herewith.
|
|||
Certification of Chief Accounting Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002
|
Filed herewith.
|
|||
Certifications of Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer pursuant to Section 906 of the Sarbanes Oxley Act of 2002
|
Filed herewith.
|
|||
101.INS
|
XBRL Instance Document
|
|||
101.SCM
|
XBRL Taxonomy Extension Schema Document
|
|||
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|||
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|||
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
|||
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
MOTORCAR PARTS OF AMERICA, INC.
|
||
Dated: November 9, 2017
|
By:
|
/s/ David Lee
|
David Lee
|
||
Chief Financial Officer
|
||
Dated: November 9, 2017
|
By:
|
/s/ Kevin Daly
|
Kevin Daly
|
||
Chief Accounting Officer
|
1 Year Motorcar Parts and Assoc... Chart |
1 Month Motorcar Parts and Assoc... Chart |
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