Motorcar Parts of America Reports Record Results for Fiscal 2014

Motorcar Parts of America Reports Record Results for Fiscal 2014  Sales Up 32.1 Percent for Quarter; 21.4 Percent for Year  LOS ANGELES, June 16, 2014 (GLOBE NEWSWIRE) -- Motorcar Parts of America, Inc. (Nasdaq:MPAA) today reported record results for its fiscal 2014 fourth quarter and year ended March 31, 2014 – reflecting continued growth of its rotating electrical business and the third full quarter of contributions from the company's wheel hub product line.  Net sales for the fiscal 2014 fourth quarter increased 32.1 percent to $76.7 million from $58.0 million for the same period last year. Net income for the quarter was $3.1 million, or $0.19 per diluted share, compared with a net loss of $73.7 million, or $5.08 per share, a year ago, which was impacted by the company's former discontinued undercar business.  Excluding certain costs and non-cash expenses noted in the Reconciliation of Non-GAAP Financial Measures tables below, adjusted net income for the fiscal 2014 fourth quarter increased 86 percent to $6.8 million, or $0.43 per diluted share, from $3.6 million, or $0.25 per diluted share, for the same period a year earlier. Per-share results reflect a 9.2 percent increase in the diluted weighted average number of shares outstanding.  Gross profit for the fiscal 2014 fourth quarter was $23.9 million compared with $18.1 million a year earlier. Gross profit as a percentage of sales was 31.2 percent compared with 31.2 percent a year earlier.  Net sales for the full-year period increased 21.4 percent to $258.7 million from $213.2 million a year ago. Net income for fiscal 2014 was $107.4 million, or $7.01 per diluted share, compared with a net loss of $91.5 million, or $6.36 per share, a year ago. Net income (loss) for both periods was impacted by the company's former discontinued undercar business.  Excluding certain costs and non-cash expenses noted in the Reconciliation of Non-GAAP Financial Measures tables below, adjusted net income for the full-year period increased 55 percent to $21.3 million, or $1.39 per diluted share, from $13.8 million, or $0.96 per diluted share, for the same period a year earlier. Per-share results reflect a 6.5 percent increase in the diluted weighted average number of shares outstanding.  Gross profit for the full year was $81.6 million compared with $69.3 million a year earlier. Gross profit as a percentage of sales was 31.5 percent compared with 32.5 percent a year earlier, reflecting product mix.  "We anticipate our solid growth will continue on a year-over-year basis, supported by an aging vehicle population, new product introductions and further opportunities for manufacturing and distribution leverage. I appreciate our team's efforts in accomplishing industry-leading customer service levels, and their dedicated focus on excellence," said Selwyn Joffe, chairman, president and chief executive officer of Motorcar Parts of America.  Use of Non-GAAP Measures  We define adjusted net income (loss) as net income (loss) adjusted for certain items related to the company's discontinued subsidiaries, as well as financing, consulting and other fees. We define Adjusted EBITDA as adjusted net income (loss), plus interest expense, income tax expense and depreciation and amortization. Adjusted net income (loss) does not reflect many items that affect the company's net income (loss), including many items related to company's discontinued subsidiaries. Adjusted EBITDA does not reflect the impact of a number of items that affect the company's net income, including financing costs and matters related to the company's discontinued subsidiaries. Adjusted EBITDA and adjusted net income (loss) are not measures of financial performance under GAAP, and should not be considered as alternatives to net income or income from operations as a measure of liquidity. Adjusted EBITDA and adjusted net income (loss) have significant limitations as analytical tools, 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 Adjusted EBITDA and adjusted net income (loss) to net income (loss) see the financial tables included in the press release.  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 Monday, June 23, 2014 by calling (855)-859-2056 (domestic) or (404)-537-3406 (international) and using access code: 57997083.  About Motorcar Parts of America  Motorcar Parts of America, Inc. is a remanufacturer, manufacturer and distributor of automotive aftermarket parts -- including alternators, starters and wheel hub assembly products utilized in imported and domestic passenger vehicles, light trucks and heavy duty applications. 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, 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 June 2013 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 Operations                                                                              Three Months Ended            Years Ended                  March 31,                    March 31,                  2014          2013            2014           2013                  (Unaudited)                                                                                              Net sales         $76,682,000 $58,042,000   $258,669,000 $213,151,000 Cost of goods     52,761,000   39,942,000     177,103,000   143,810,000 sold Gross profit      23,921,000   18,100,000     81,566,000    69,341,000 Operating                                                    expenses: General and       11,766,000   6,653,000      39,684,000    25,807,000 administrative Sales and         2,059,000    1,811,000      7,838,000     7,290,000 marketing Research and      541,000      588,000        1,940,000     1,930,000 development Total operating   14,366,000   9,052,000      49,462,000    35,027,000 expenses Operating income  9,555,000    9,048,000      32,104,000    34,314,000 Interest expense, 3,177,000    3,951,000      18,289,000    12,324,000 net Income from continuing operations before 6,378,000    5,097,000      13,815,000    21,990,000 income tax expense Income tax        3,311,000    1,195,000      7,333,000     7,432,000 expense Income from continuing        3,067,000    3,902,000      6,482,000     14,558,000 operations Income (loss) from discontinued --          (77,553,000)   100,877,000   (106,069,000) operations                                                             Net income (loss) $3,067,000  $(73,651,000) $107,359,000 $(91,511,000)                                                             Basic net income per share from    $0.20       $0.27         $0.45        $1.01 continuing operations Basic net income (loss) per share  --          (5.36)         6.89          (7.40) from discontinued operations                                                             Basic net income  $0.20       $(5.09)       $7.34        $(6.39) (loss) per share                                                             Diluted net income per share  $0.19       $0.27         $0.42        $1.01 from continuing operations Diluted net income (loss) per share from        --          (5.35)         6.59          (7.37) discontinued operations                                                             Diluted net income (loss) per $0.19       $(5.08)       $7.01        $(6.36) share Weighted average number of shares                                             outstanding: Basic             14,996,959    14,462,457      14,633,946     14,327,310 Diluted           15,819,326    14,491,858      15,317,931     14,385,515                                                              MOTORCAR PARTS OF AMERICA, INC. AND SUBSIDIARIES Consolidated Balance Sheets March 31,                                                                                                                2014           2013 ASSETS                                                          Current assets:                                                 Cash                                             $24,599,000  $19,346,000 Short-term investments                           521,000       411,000 Accounts receivable — net                        22,283,000    3,689,000 Inventory— net                                   47,246,000    31,838,000 Inventory unreturned                             7,534,000     6,981,000 Deferred income taxes                            18,767,000    30,996,000 Prepaid expenses and other current assets        4,316,000     8,195,000 Current assets of discontinued operations        --            51,175,000 Total current assets                             125,266,000   152,631,000 Plant and equipment — net                        11,025,000    10,036,000 Long-term core inventory — net                   143,476,000   118,211,000 Long-term core inventory deposits                29,375,000    27,610,000 Long-term deferred income taxes                  2,614,000     2,377,000 Intangible assets — net                          3,244,000     3,983,000 Other assets                                     3,853,000     5,618,000 Long-term assets of discontinued operations      --            44,503,000 TOTAL ASSETS                                     $318,853,000 $364,969,000 LIABILITIES AND SHAREHOLDERS'EQUITY                            Current liabilities:                                           Accounts payable                                $59,509,000  $39,152,000 Accrued liabilities                              8,316,000     9,326,000 Customer finished goods returns accrual          16,251,000    14,289,000 Revolving loan                                   10,000,000    -- Other current liabilities                        1,270,000     1,192,000 Current portion of term loan                     7,843,000     3,775,000 Current liabilities of discontinued operations   --           151,914,000 Total current liabilities                        103,189,000   219,648,000 Term loan, less current portion                  79,434,000    78,130,000 Deferred core revenue                            15,065,000    12,014,000 Other liabilities                                11,529,000    3,481,000 Long-term liabilities of discontinued operations --           55,210,000 Total liabilities                                209,217,000   368,483,000 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 and 20,000,000 shares authorized;15,067,645 and 14,460,979 shares     151,000       145,000 issued and outstanding at March 31, 2014 and2013, respectively Additional paid-in capital                       120,553,000   114,737,000 Accumulated other comprehensive loss             (877,000)     (846,000) Accumulated deficit                              (10,191,000)  (117,550,000) Total shareholders' equity (deficit)            109,636,000   (3,514,000) TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY       $318,853,000 $364,969,000                                                                 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 three and twelve months ended March 31, 2014 and 2013. 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 twelve months ended March 31, 2014 and 2013 are as follows:  Reconciliation of Non-GAAP Financial                                           Exhibit 1 Measures                                                                                Three Months Ended March 31, Years Ended March 31,                   2014           2013           2014           2013 GAAP Results:                                                 Net sales          $76,682,000  $58,042,000  $258,669,000 $213,151,000 Net income (loss)  3,067,000     (73,651,000)  107,359,000   (91,511,000) Diluted income (loss) per share   0.19          (5.08)        7.01          (6.36) (EPS) Non-GAAP Adjusted                                             Results: Non-GAAP adjusted  $6,778,000   $3,635,000   $21,258,000  $13,753,000 net income Non-GAAP adjusted diluted earnings   0.43          0.25          1.39          0.96 per share (EPS) Non-GAAP adjusted  14,940,000    10,452,000    52,419,000    41,218,000 EBITDA                                                                 Reconciliation of Non-GAAP Financial                                             Exhibit 2 Measures                                                                                       Three Months Ended March 31,                        2014                    2013                        $          Per Diluted $             Per Diluted                                      Share                       Share GAAP net income (loss), $3,067,000 $0.19      $(73,651,000) $(5.08) as reported Adjustments:                                                    (Income) loss from      --         $--       77,553,000     $5.35 discontinued operations Operating expenses                                              Disc. subsidiaries legal, severance and    670,000     $0.04      --            -- other costs Financing and other     --         --         1,402,000      $0.10 fees Share-based             419,000     $0.03      93,000         $0.01 compensation expense Mark-to-market losses   3,645,000   $0.23      (878,000)      $(0.06) (gains) Consulting fees, research and            --         --         75,000         $0.01 development Interest                                                        Disc. subsidiaries related interest expense less            --         --         170,000        $0.01 intersegment interest income Tax effected at 39% tax (1,023,000) $(0.06)    (1,129,000)    $(0.08) rate (a) Adjusted net income     $6,778,000 $0.43      $3,635,000    $0.25                                                                (a) Tax effect at 39% of the income from continuing operations before income tax expense (reflecting the adjustments)   Reconciliation of Non-GAAP Financial                                             Exhibit 3 Measures                                                                                     Years Ended March 31,                      2014                      2013                      $            Per Diluted $             Per Diluted                                      Share                       Share GAAP net income       $107,359,000 $7.01      $(91,511,000) $(6.36) (loss), as reported Adjustments:                                                    (Income) loss from discontinued          (100,877,000) $(6.59)    106,069,000    $7.37 operations Net sales                                                       Return, stock adjustment and        1,412,000     $0.09      --            -- rebates accruals Cost of goods sold                                              Cost of stock adj. accrual and disc.     (29,000)      $(0.002)   --            -- subsidiaries costs Operating expenses                                              Disc. subsidiaries legal, severance and  4,056,000     $0.26      --            -- other costs Financing and other   --           --         3,384,000      $0.24 fees Share-based           969,000       $0.06      1,010,000      $0.07 compensation expense Mark-to-market losses 11,069,000    $0.72      (414,000)      $(0.03) (gains) Disc. subsidiaries sales and marketing   21,000        $0.001     --            -- expenses Consulting fees, research and          75,000        $0.005     75,000         $0.01 development Interest                                                        Disc. subsidiaries supplier revolving credit line interest  3,462,000     $0.23      --            -- and write-off prior deferred loan fees Disc. subsidiaries related interest expense less          --           --         (3,499,000)    $(0.24) intersegment interest income Tax effected at 39%   (6,259,000)   $(0.41)    (1,361,000)    $(0.09) tax rate (a) Adjusted net income   $21,258,000  $1.39      $13,753,000   $0.96                                                                (a) Tax effect at 39% of the income from continuing operations before income tax expense (reflecting the adjustments)                                                                 Reconciliation of Non-GAAP                                                    Exhibit 4 Financial Measures                                                                              Three Months Ended March 31, Years Ended March 31,                  2014          2013            2014           2013 GAAP net income (loss), as        $3,067,000  $(73,651,000) $107,359,000 $(91,511,000) reported (Income) loss from discontinued --          77,553,000     (100,877,000) 106,069,000 operations Interest expense, 3,177,000    3,951,000      18,289,000    12,324,000 net Income tax        3,311,000    1,195,000      7,333,000     7,432,000 expense Depreciation and  651,000      712,000        2,742,000     2,849,000 amortization EBITDA, as        $10,206,000 $9,760,000    $34,846,000  $37,163,000 reported                                                             Adjustments:                                                 Net sales                                                    Return, stock adjustment and    --          --            1,412,000     -- rebates accruals Cost of goods                                                sold Cost of stock adj. accrual and disc.             --          --            (29,000)      -- subsidiaries costs Operating                                                    expenses Disc. subsidiaries      670,000      --            4,056,000     -- legal, severance and other costs Financing and     --          1,402,000      --           3,384,000 other fees Share-based compensation      419,000      93,000         969,000       1,010,000 expense Mark-to-market    3,645,000    (878,000)      11,069,000    (414,000) losses (gains) Disc. subsidiaries sales and         --          --            21,000        -- marketing expenses Consulting fees, research and      --          75,000         75,000        75,000 development Adjusted EBITDA   $14,940,000 $10,452,000   $52,419,000  $41,218,000                                                              CONTACT: Gary S. Maier          Maier & Company, Inc.          (310) 471-1288  
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