• |
Sales volume is continuing to gain momentum.
|
o |
Ordering activity is strong.
|
o |
Extreme heat and strong industry fundamentals will enhance product demand.
|
• |
Margin improvement expected.
|
o |
Price increases.
|
o |
Better overhead absorption as the brake-related business grows.
|
◾ |
Overall gross profit is expected to increase in the interim.
|
o |
Operating efficiencies.
|
• |
Enhanced cash flow from working capital initiatives.
|
Three Months Ended
| ||||||||
June 30,
| ||||||||
2023
|
2022
| |||||||
Net sales
|
$
|
159,705,000
|
$
|
163,985,000
| ||||
Cost of goods sold
|
133,138,000
|
133,683,000
| ||||||
Gross profit
|
26,567,000
|
30,302,000
| ||||||
Operating expenses:
| ||||||||
General and administrative
|
12,602,000
|
13,634,000
| ||||||
Sales and marketing
|
5,419,000
|
5,542,000
| ||||||
Research and development
|
2,375,000
|
3,113,000
| ||||||
Foreign exchange impact of lease liabilities and forward contracts
|
(4,270,000
|
)
|
678,000
| |||||
Total operating expenses
|
16,126,000
|
22,967,000
| ||||||
Operating income
|
10,441,000
|
7,335,000
| ||||||
Other expenses:
| ||||||||
Interest expense, net
|
11,720,000
|
6,921,000
| ||||||
Change in fair value of compound net derivative liability
|
140,000
|
-
| ||||||
Total other expenses
|
11,860,000
|
6,921,000
| ||||||
(Loss) income before income tax (benefit) expense
|
(1,419,000
|
)
|
414,000
| |||||
Income tax (benefit) expense
|
(9,000
|
)
|
589,000
| |||||
Net loss
|
$
|
(1,410,000
|
)
|
$
|
(175,000
|
)
| ||
Basic net loss per share
|
$
|
(0.07
|
)
|
$
|
(0.01
|
)
| ||
Diluted net loss per share
|
$
|
(0.07
|
)
|
$
|
(0.01
|
)
| ||
Weighted average number of shares outstanding:
| ||||||||
Basic
|
19,508,626
|
19,123,354
| ||||||
Diluted
|
19,508,626
|
19,123,354
|
June 30, 2023
|
March 31, 2023
| |||||||
ASSETS
|
(Unaudited)
| |||||||
Current assets:
| ||||||||
Cash and cash equivalents
|
$
|
10,887,000
|
$
|
11,596,000
| ||||
Short-term investments
|
2,159,000
|
2,011,000
| ||||||
Accounts receivable - net
|
146,645,000
|
119,868,000
| ||||||
Inventory
|
364,187,000
|
356,254,000
| ||||||
Contract assets
|
27,732,000
|
25,443,000
| ||||||
Prepaid expenses and other current assets
|
20,566,000
|
22,306,000
| ||||||
Total current assets
|
572,176,000
|
537,478,000
| ||||||
Plant and equipment - net
|
44,244,000
|
46,052,000
| ||||||
Operating lease assets
|
88,760,000
|
87,619,000
| ||||||
Long-term deferred income taxes
|
32,417,000
|
32,625,000
| ||||||
Long-term contract assets
|
314,463,000
|
318,381,000
| ||||||
Goodwill and intangible assets - net
|
5,046,000
|
5,348,000
| ||||||
Other assets
|
1,081,000
|
1,062,000
| ||||||
TOTAL ASSETS
|
$
|
1,058,187,000
|
$
|
1,028,565,000
| ||||
LIABILITIES AND SHAREHOLDERS' EQUITY
| ||||||||
Current liabilities:
| ||||||||
Accounts payable and accrued liabilities
|
$
|
142,965,000
|
$
|
141,766,000
| ||||
Customer finished goods returns accrual
|
33,378,000
|
37,984,000
| ||||||
Contract liabilities
|
49,003,000
|
40,340,000
| ||||||
Revolving loan
|
167,000,000
|
145,200,000
| ||||||
Other current liabilities
|
5,170,000
|
4,871,000
| ||||||
Operating lease liabilities
|
8,914,000
|
8,767,000
| ||||||
Current portion of term loan
|
12,020,000
|
3,664,000
| ||||||
Total current liabilities
|
418,450,000
|
382,592,000
| ||||||
Term loan, less current portion
|
-
|
9,279,000
| ||||||
Convertible notes, related party
|
31,252,000
|
30,994,000
| ||||||
Long-term contract liabilities
|
194,708,000
|
193,606,000
| ||||||
Long-term deferred income taxes
|
1,985,000
|
718,000
| ||||||
Long-term operating lease liabilities
|
77,013,000
|
79,318,000
| ||||||
Other liabilities
|
11,340,000
|
11,583,000
| ||||||
Total liabilities
|
734,748,000
|
708,090,000
| ||||||
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;
| ||||||||
19,599,145 and 19,494,615 shares issued and outstanding at June 30, 2023 and
| ||||||||
March 31, 2023, respectively
|
196,000
|
195,000
| ||||||
Additional paid-in capital
|
232,866,000
|
231,836,000
| ||||||
Retained earnings
|
87,337,000
|
88,747,000
| ||||||
Accumulated other comprehensive income (loss)
|
3,040,000
|
(303,000
|
)
| |||||
Total shareholders' equity
|
323,439,000
|
320,475,000
| ||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
|
$
|
1,058,187,000
|
$
|
1,028,565,000
|
Three Months Ended June 30,
| ||||||||||||||||
2023
|
2022
| |||||||||||||||
$ |
Per Share
|
$ |
Per Share
| |||||||||||||
GAAP net loss
|
$
|
(1,410,000
|
)
|
$
|
(0.07
|
)
|
$
|
(175,000
|
)
|
$
|
(0.01
|
)
| ||||
Non-cash items impacting net loss
| ||||||||||||||||
Core and finished goods premium amortization
|
$
|
2,657,000
|
$
|
0.14
|
$
|
3,044,000
|
$
|
0.16
| ||||||||
Revaluation - cores on customers' shelves
|
778,000
|
0.04
|
572,000
|
0.03
| ||||||||||||
Share-based compensation expenses
|
1,310,000
|
0.07
|
1,249,000
|
0.07
| ||||||||||||
Foreign exchange impact of lease liabilities and forward contracts
|
(4,270,000
|
)
|
(0.22
|
)
|
678,000
|
0.04
| ||||||||||
Change in fair value of compound net derivative liability
|
140,000
|
0.01
|
-
|
-
| ||||||||||||
Tax effect (a)
|
(154,000
|
)
|
(0.01
|
)
|
(1,386,000
|
)
|
(0.07
|
)
| ||||||||
Total non-cash items impacting net loss
|
$
|
461,000
|
$
|
0.02
|
$
|
4,157,000
|
$
|
0.22
| ||||||||
Cash items impacting net loss
| ||||||||||||||||
Supply chain disruptions and related costs (b)
|
$
|
1,984,000
|
$
|
0.10
|
$
|
3,094,000
|
$
|
0.16
| ||||||||
New product line start-up costs and transition expenses, and severance (c)
|
335,000
|
0.02
|
618,000
|
0.03
| ||||||||||||
Tax effect (a)
|
(580,000
|
)
|
(0.03
|
)
|
(928,000
|
)
|
(0.05
|
)
| ||||||||
Total cash items impacting net loss
|
$
|
1,739,000
|
$
|
0.09
|
$
|
2,784,000
|
$
|
0.15
|
Three Months Ended June 30,
| ||||||||||||||||
2023
|
2022
| |||||||||||||||
$ |
Gross
Margin
|
$ |
Gross
Margin
| |||||||||||||
GAAP gross profit
|
$
|
26,567,000
|
16.6
|
%
|
$
|
30,302,000
|
18.5
|
%
| ||||||||
Non-cash items impacting gross profit
| ||||||||||||||||
Core and finished goods premium amortization
|
$
|
2,657,000
|
1.7
|
%
|
$
|
3,044,000
|
1.9
|
%
| ||||||||
Revaluation - cores on customers' shelves
|
778,000
|
0.5
|
%
|
572,000
|
0.3
|
%
| ||||||||||
Total non-cash items impacting gross profit
|
$
|
3,435,000
|
2.2
|
%
|
$
|
3,616,000
|
2.2
|
%
| ||||||||
Cash items impacting gross profit
| ||||||||||||||||
Supply chain disruptions and related costs
|
$
|
1,984,000
|
1.0
|
%
|
$
|
2,548,000
|
1.6
|
%
| ||||||||
Total cash items impacting gross profit
|
$
|
1,984,000
|
1.0
|
%
|
$
|
2,548,000
|
1.6
|
%
|
Three Months Ended June 30,
| ||||||||
2023
|
2022
| |||||||
GAAP net loss
|
$
|
(1,410,000
|
)
|
$
|
(175,000
|
)
| ||
Interest expense, net
|
11,720,000
|
6,921,000
| ||||||
Income tax (benefit) expense
|
(9,000
|
)
|
589,000
| |||||
Depreciation and amortization
|
3,033,000
|
3,124,000
| ||||||
EBITDA
|
$
|
13,334,000
|
$
|
10,459,000
| ||||
Non-cash items impacting EBITDA
| ||||||||
Core and finished goods premium amortization
|
$
|
2,657,000
|
$
|
3,044,000
| ||||
Revaluation - cores on customers' shelves
|
778,000
|
572,000
| ||||||
Share-based compensation expenses
|
1,310,000
|
1,249,000
| ||||||
Foreign exchange impact of lease liabilities and forward contracts
|
(4,270,000
|
)
|
678,000
| |||||
Change in fair value of compound net derivative liability
|
140,000
|
-
| ||||||
Total non-cash items impacting EBITDA
|
$
|
615,000
|
$
|
5,543,000
| ||||
Cash items impacting EBITDA
| ||||||||
Supply chain disruptions and related costs
|
$
|
1,984,000
|
$
|
3,094,000
| ||||
New product line start-up costs and transition expenses, and severance
|
335,000
|
618,000
| ||||||
Total cash items impacting EBITDA
|
$
|
2,319,000
|
$
|
3,712,000
|
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Disclaimer
MPA - Motorcar Parts of America Inc. published this content on 09 August 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 09 August 2023 12:01:01 UTC.