Motorcar Parts of America, Inc. (NASDAQ:MPAA) Files An 8-K Results of Operations and Financial Condition
Item 2.02.
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Results of Operations and Financial Condition
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On June 14, 2017, Motorcar Parts of America, Inc. (the
Company) issued a press release announcing its earnings for
the fiscal quarter and fiscal year ended March 31, 2017 which
is being furnished as Exhibit 99.1. The information contained
herein and in the accompanying exhibit shall not be
incorporated by reference into any filing of the Company,
whether made before or after the date hereof, regardless of
any general incorporation language in such filing, unless
expressly incorporated by specific reference to such filing.
The information in this report, including the exhibit hereto,
shall not be deemed to be filed for purposes of Section 18 of
the Securities Exchange Act of 1934, as amended, or otherwise
subject to the liabilities of that section or Sections 11 and
12(a)(2) of the Securities Act of 1933, as amended.
Company) issued a press release announcing its earnings for
the fiscal quarter and fiscal year ended March 31, 2017 which
is being furnished as Exhibit 99.1. The information contained
herein and in the accompanying exhibit shall not be
incorporated by reference into any filing of the Company,
whether made before or after the date hereof, regardless of
any general incorporation language in such filing, unless
expressly incorporated by specific reference to such filing.
The information in this report, including the exhibit hereto,
shall not be deemed to be filed for purposes of Section 18 of
the Securities Exchange Act of 1934, as amended, or otherwise
subject to the liabilities of that section or Sections 11 and
12(a)(2) of the Securities Act of 1933, as amended.
The attached exhibit includes non-GAAP Adjusted net sales,
non-GAAP adjusted net income (loss), non-GAAP adjusted
EBITDA, non-GAAP adjusted gross profit and non-GAAP adjusted
gross margin. The Company believes that these supplemental
non-GAAP financial measures, when presented together with the
corresponding GAAP financial measures, provide useful
information to investors and management regarding financial
and business trends relating to its results of operations.
However, non-GAAP financial measures have certain limitations
in that they do not reflect all of the costs associated with
the operations of the Companys business as determined in
accordance with GAAP. Therefore, investors should consider
non-GAAP financial measures in addition to, and not as a
substitute for, or as superior to, measures of financial
performance prepared in accordance with GAAP.
non-GAAP adjusted net income (loss), non-GAAP adjusted
EBITDA, non-GAAP adjusted gross profit and non-GAAP adjusted
gross margin. The Company believes that these supplemental
non-GAAP financial measures, when presented together with the
corresponding GAAP financial measures, provide useful
information to investors and management regarding financial
and business trends relating to its results of operations.
However, non-GAAP financial measures have certain limitations
in that they do not reflect all of the costs associated with
the operations of the Companys business as determined in
accordance with GAAP. Therefore, investors should consider
non-GAAP financial measures in addition to, and not as a
substitute for, or as superior to, measures of financial
performance prepared in accordance with GAAP.
The Company makes adjustments to the following items to
calculate its non-GAAP financial measures:
calculate its non-GAAP financial measures:
Initial return and stock adjustment accruals related to new
business. In connection with new business, the Company may
establish initial return and stock adjustment accruals to
account for the anticipated increased levels of business
activity. The Company excluded these initial up-front
accruals from net sales because they do not reflect the
Companys operations on an ongoing basis and excluding such
accruals enables period-over-period comparability.
business. In connection with new business, the Company may
establish initial return and stock adjustment accruals to
account for the anticipated increased levels of business
activity. The Company excluded these initial up-front
accruals from net sales because they do not reflect the
Companys operations on an ongoing basis and excluding such
accruals enables period-over-period comparability.
Customer allowances related to new business. In connection
with new business, the Company may purchase cores from
customers, may purchase the customers prior suppliers
inventory, or may provide certain customer allowances. The
allowances are granted on a negotiated basis, and the
Company excluded these allowances from net sales because
they do not reflect ongoing product pricing or net sales
and excluding such allowances enables period-over-period
comparability.
with new business, the Company may purchase cores from
customers, may purchase the customers prior suppliers
inventory, or may provide certain customer allowances. The
allowances are granted on a negotiated basis, and the
Company excluded these allowances from net sales because
they do not reflect ongoing product pricing or net sales
and excluding such allowances enables period-over-period
comparability.
New product line start-up and ramp-up costs. These are
start-up costs incurred prior to recognizing sales for the
launch of new product lines and costs of ramping up
production. The Company excluded start-up and ramp-up costs
because they do not reflect the Companys operations on an
ongoing basis and excluding such costs enables
period-over-period comparability.
start-up costs incurred prior to recognizing sales for the
launch of new product lines and costs of ramping up
production. The Company excluded start-up and ramp-up costs
because they do not reflect the Companys operations on an
ongoing basis and excluding such costs enables
period-over-period comparability.
Lower of cost or net realizable value – cores on customers’
shelves and inventory step-up amortization. On a quarterly
basis, the Company revalues long-term core inventory based on
lower of cost or net realizable value in accordance with the
Companys accounting policies. The impact of this revaluation
is reflected in cost of goods sold. The Company excluded the
lower of cost or net realizable value revaluation for cores
on customers shelves because the core inventory on the
customers shelves is not consumed or realized in cash during
the Companys normal operating cycle. Additionally,
amortization of inventory step-up relates to an acquisition
and is excluded because it is not ongoing. Neither is used by
management to assess the profitability of its business
operations.
shelves and inventory step-up amortization. On a quarterly
basis, the Company revalues long-term core inventory based on
lower of cost or net realizable value in accordance with the
Companys accounting policies. The impact of this revaluation
is reflected in cost of goods sold. The Company excluded the
lower of cost or net realizable value revaluation for cores
on customers shelves because the core inventory on the
customers shelves is not consumed or realized in cash during
the Companys normal operating cycle. Additionally,
amortization of inventory step-up relates to an acquisition
and is excluded because it is not ongoing. Neither is used by
management to assess the profitability of its business
operations.
Cost of customer allowances and stock adjustment accruals
related to new business. As described above for the
adjustments to net sales, the Company also adds back the cost
of customer allowances related to inventory purchases and
stock adjustment accruals to cost of goods sold because they
do not reflect the Companys operations on an ongoing basis
and excluding such costs enables period-over-period
comparability.
related to new business. As described above for the
adjustments to net sales, the Company also adds back the cost
of customer allowances related to inventory purchases and
stock adjustment accruals to cost of goods sold because they
do not reflect the Companys operations on an ongoing basis
and excluding such costs enables period-over-period
comparability.
Legal, severance, acquisition, financing, transition and
other costs. The Company has incurred significant legal costs
related to discontinued subsidiaries and a settlement payment
related to a claim by an investment bank. Additionally, the
Company has incurred severance, acquisition, financing,
transition and other costs that are not related to current
operations. The Company excluded these costs to enable
period-over-period comparability.
other costs. The Company has incurred significant legal costs
related to discontinued subsidiaries and a settlement payment
related to a claim by an investment bank. Additionally, the
Company has incurred severance, acquisition, financing,
transition and other costs that are not related to current
operations. The Company excluded these costs to enable
period-over-period comparability.
Payment received in connection with the settlement of
litigation related to discontinued subsidiaries. The
Company received a payment in connection with the
settlement of litigation related to discontinued
subsidiaries. The Company excluded this payment to enable
period-over-period comparability.
litigation related to discontinued subsidiaries. The
Company received a payment in connection with the
settlement of litigation related to discontinued
subsidiaries. The Company excluded this payment to enable
period-over-period comparability.
Bad debt expense resulting from the bankruptcy filing by a
customer. The Company incurred bad debt expense related to
the bankruptcy filing by a customer. The Company excluded
the expense for this customer because it does not believe
this expense is reflective of ongoing business and
operating results.
customer. The Company incurred bad debt expense related to
the bankruptcy filing by a customer. The Company excluded
the expense for this customer because it does not believe
this expense is reflective of ongoing business and
operating results.
Payment made in connection with the settlement of litigation,
net of insurance recoveries, related to discontinued
subsidiaries. The Company made a payment in connection with
the settlement of litigation related to discontinued
subsidiaries. The Company believes excluding this payment,
net of insurance recoveries, enables period-over-period
comparability.
net of insurance recoveries, related to discontinued
subsidiaries. The Company made a payment in connection with
the settlement of litigation related to discontinued
subsidiaries. The Company believes excluding this payment,
net of insurance recoveries, enables period-over-period
comparability.
Share-based compensation expenses. These expenses primarily
consist of the cost to provide employee restricted stock and
restricted stock units, and employee stock options. The
Company excluded share-based compensation expense because it
is not used by management to assess the profitability of its
business operations.
consist of the cost to provide employee restricted stock and
restricted stock units, and employee stock options. The
Company excluded share-based compensation expense because it
is not used by management to assess the profitability of its
business operations.
Mark-to-market losses (gains). The Company excluded
mark-to-market gains and losses because they are unrealized
and are not reflective of actual current cash flows and
operating results.
mark-to-market gains and losses because they are unrealized
and are not reflective of actual current cash flows and
operating results.
Write-off of prior deferred loan fees. The Company excluded
the write-off of prior deferred loan fees because they are
related to the Companys prior term loan, not the Companys
ongoing business operations or financing arrangements.
the write-off of prior deferred loan fees because they are
related to the Companys prior term loan, not the Companys
ongoing business operations or financing arrangements.
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Item 9.01.
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Financial Statements and Exhibits.
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The following exhibit is furnished with this Current Report to
Item 2.02:
Item 2.02:
(d) Exhibits
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Exhibit
No.
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Description
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99.1
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Press Release, dated June 14, 2017
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About Motorcar Parts of America, Inc. (NASDAQ:MPAA)
Motorcar Parts of America, Inc. is a manufacturer, remanufacturer and distributor of automotive aftermarket parts, including alternators, starters, wheel hub assembly, brake master cylinders, brake power boosters and turbochargers utilized in imported and domestic passenger vehicles, light trucks and heavy-duty applications. The Company sells its products in North America to auto parts retail and traditional warehouse chains and to automobile manufacturers for both their aftermarket programs and their warranty replacement programs (OES). It recycles materials, including metal from the used cores and corrugated packaging. The Company carries over 13,000 stock keeping units (SKUs) for automotive parts that are sold under its customers’ recognized private label brand names and its Quality-Built, Pure Energy, Xtreme, Reliance and other brand names. It sells its products to automotive retail outlets and the professional repair market throughout the United States and Canada.