Motorcar Parts Of America Reports Fiscal 2013 Fourth Quarter And Year-End Results

LOS ANGELES, June 17, 2013 (GLOBE NEWSWIRE) -- Motorcar Parts of America, Inc. (Nasdaq:MPAA) today reported results for its fiscal 2013 fourth quarter and year ended March 31, 2013 – reflecting record sales for its rotating electrical business offset by the establishment of specific charge-off accruals related to its former undercar business segment.

Rotating electrical net sales for the fiscal 2013 fourth quarter increased 11.8 percent to $58.0 million from $51.9 million for the same period last year. Gross profit for the rotating electrical segment for the fourth quarter was $18.1 million compared with $16.8 million a year earlier. Gross profit as a percentage of sales for the rotating electrical segment was 31.2 percent compared with 32.5 percent last year. Excluding certain undercar-related costs and non-cash expenses noted in the Reconciliation of Non-GAAP Financial Measures tables below, adjusted EBITDA for the company's rotating electrical segment was $10.5 million compared with $10.3 million for the same period a year earlier, and adjusted net income was $3.6 million, or $0.26 per diluted share, compared with $3.7 million, or $0.30 per diluted share, for the same period a year earlier.

The company reported a consolidated net loss for the fiscal 2013 fourth quarter of $73.7 million, or $5.09 per share, compared with a net loss of $12.9 million, or $1.03 per share, a year earlier. Consolidated results include specific charge-off accruals related to the company's investment in its former undercar business segment, and the required impairment of all intangible assets on Fenco's balance sheet as a result of its pending liquidation. On a non-GAAP adjusted basis, consolidated net loss was $2.1 million, or $0.14 per share compared with a net loss of $4.0 million, or $0.32 per share, a year ago.

Rotating electrical net sales for fiscal 2013 increased 18.2 percent to $213.2 million from $180.4 million for the prior fiscal year. Gross profit for the rotating electrical segment for fiscal 2013 was $69.3 million compared with $57.3 million a year earlier. Gross profit as a percentage of sales for the rotating electrical segment was 32.5 percent compared with 31.8 percent last year. Excluding certain undercar-related costs and non-cash expenses noted in the Reconciliation of Non-GAAP Financial Measures tables below, adjusted EBITDA for the company's rotating electrical segment was $41.2 million compared with $32.1 million for the prior fiscal year, and adjusted net income was $13.8 million, or $0.98 per diluted share, reflecting higher interest expense, compared with $13.0 million, or $1.04 per diluted share, for fiscal 2012.

The company reported a consolidated net loss for fiscal 2013 of $91.5 million, or $6.39 per share, compared with a net loss of $48.5 million, or $3.90 per share, a year ago. Consolidated results include specific charge-off accruals related to the company's investment in its former undercar business segment, and the required impairment of all intangible assets on Fenco's balance sheet as a result of its pending liquidation. On a non-GAAP adjusted basis, consolidated net loss was $12.2 million, or $0.85 per share compared with a net loss of $10.4 million, or $0.84 per share for the same period a year earlier.

"While we had made significant progress in our turnaround efforts for Fenco, it became clear that the cost savings and operational efficiencies that we achieved were not sufficient to continue our investment under the existing economic model. However, our rotating electrical business is the cornerstone of our company and it is performing well. We expect continued growth, supported by strong liquidity with a cash position of $19.0 million and approximately $18.0 million available under the company's revolving credit facility at fiscal year end. Our management team is resilient, our customers are supportive and we look forward to the opportunities ahead," said Selwyn Joffe, chairman, president and chief executive officer of Motorcar Parts of America.

Joffe noted that the company expects to realize tax benefits of approximately $30 million as a result of the losses incurred through Fenco, which should further enhance Motorcar Parts of America's liquidity.

He added that during the fourth quarter the company repurchased an aggregate 135, 327 shares and vested options at a weighted average price of $4.84, or a total of $654,675.

Use of Non-GAAP Measures

We define adjusted net loss as net loss adjusted for matters affecting net sales for our undercar product line, financing, consulting and other fees, share-based compensation expense, undercar product lines not supported, and other matters. We define Adjusted EBITDA as adjusted net income (loss), plus interest expense, income tax expense and depreciation and amortization. We calculate those measures for the entire company as well as the rotating electrical segment. Adjusted net loss does not reflect many items that affect the company's net loss, including many items related to Fenco. Adjusted EBITDA does not reflect the impact of a number of items that affect the company's net income, including financing, transition and acquisition-related costs. Adjusted EBITDA and adjusted net 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 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 net income (loss) to Adjusted EBITDA and adjusted net loss, for the company and the rotating electrical segment, 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 the same day 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 Monday, June 17, 2013 through 8:59 p.m. Pacific time on Monday, June 24, 2013 by calling (855)-859-2056 (domestic) or (404)-537-3406 (international) and using access code: 93948671.

About Motorcar Parts of America

Motorcar Parts of America, Inc. is a remanufacturer of alternators and starters 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 September 2012 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 Income
         
  Three Months Ended Twelve Months Ended
  March 31,  March 31, 
  2013 2012 2013 2012
  (Unaudited)    
         
Net sales  $ 89,336,000  $ 101,464,000  $ 406,266,000  $ 363,687,000
Cost of goods sold  86,486,000  94,188,000  350,538,000  335,980,000
Gross profit  2,850,000  7,276,000  55,728,000  27,707,000
Operating expenses:        
General and administrative  8,990,000  9,108,000  44,526,000  38,881,000
Sales and marketing  2,583,000  3,785,000  12,713,000  12,804,000
Research and development  924,000  495,000  2,628,000  1,765,000
Impairment of goodwill and intangible assets  84,686,000  --   84,686,000  -- 
Impairment of plant and equipment  --   --   --   1,031,000
Acquisition costs  --   --   --   713,000
Total operating expenses  97,183,000  13,388,000  144,553,000  55,194,000
Operating (loss) income  (94,333,000)  (6,112,000)  (88,825,000)  (27,487,000)
Other expense:        
Interest expense, net  7,271,000  5,690,000  24,406,000  14,255,000
(Loss) income before income tax expense  (101,604,000)  (11,802,000)  (113,231,000)  (41,742,000)
Income tax expense  (27,953,000)  1,141,000  (21,720,000)  6,772,000
         
Net (loss) income  $ (73,651,000)  $ (12,943,000)  $ (91,511,000)  $ (48,514,000)
         
Basic net (loss) income per share  $ (5.09)  $ (1.03)  $ (6.39)  $ (3.90)
         
Diluted net (loss) income per share  $ (5.09)  $ (1.03)  $ (6.39)  $ (3.90)
         
Weighted average number of shares outstanding:        
Basic 14,462,457 12,519,421 14,327,310 12,442,684
         
Diluted 14,462,457 12,519,421 14,327,310 12,442,684
 
 
MOTORCAR PARTS OF AMERICA, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
March 31,
     
  2013 2012
ASSETS    
Current assets:    
Cash   $ 19,434,000  $ 32,617,000
Short-term investments   411,000  342,000
Accounts receivable — net   14,311,000  20,036,000
Inventory— net   61,090,000  95,071,000
Inventory unreturned   12,150,000  9,819,000
Deferred income taxes   34,885,000  3,793,000
Prepaid expenses and other current assets   10,350,000  6,553,000
Total current assets   152,631,000  168,231,000
 Plant and equipment — net   14,083,000  12,738,000
 Long-term core inventory — net   158,476,000  194,406,000
 Long-term core inventory deposits   27,610,000  26,939,000
 Long-term deferred income taxes   2,546,000  1,857,000
 Goodwill   --  68,356,000
 Intangible assets — net   3,983,000  22,484,000
 Other assets   7,745,000  6,887,000
TOTAL ASSETS   $ 367,074,000  $ 501,898,000
LIABILITIES AND SHAREHOLDERS' EQUITY    
Current liabilities:     
Accounts payable   $ 113,753,000  $ 126,100,000
Accrued liabilities   14,856,000  19,379,000
Customer finished goods returns accrual   24,978,000  21,695,000
Other current liabilities   3,009,000  2,745,000
Current portion of term loan   3,900,000  500,000
Revolving loan - in default   49,277,000  -- 
Term loan - in default   10,000,000  -- 
Total current liabilities   219,773,000  170,419,000
 Term loan, less current portion   80,110,000  84,500,000
 Revolving loan   --  48,884,000
 Deferred core revenue   12,014,000  9,775,000
 Customer core returns accrual   50,414,000  113,702,000
 Other liabilities   8,277,000  999,000
Total liabilities   370,588,000  428,279,000
 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, 20,000,000 shares authorized; 14,460,979 and 12,533,821 shares issued; 14,460,979 and 12,519,421 outstanding at March 31, 2013 and 2012, respectively   145,000  125,000
Treasury stock, at cost, none at March 31, 2013 and 14,400 shares of common stock at March 31, 2012   --   (89,000)
Additional paid-in capital   114,737,000  98,627,000
Additional paid-in capital-warrant   --   1,879,000
Accumulated other comprehensive loss   (846,000)  (884,000)
Accumulated deficit   (117,550,000)  (26,039,000)
Total shareholders' (deficit) equity   (3,514,000)  73,619,000
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $ 367,074,000  $ 501,898,000
 
 
MOTORCAR PARTS OF AMERICA, INC.
Consolidating Statement of Operations
Year Ended March 31, 2013
         
  MPA (1) Fenco (2) Eliminations Consolidated
         
Net sales  $ 213,151,000  $ 193,115,000  $ --   $ 406,266,000
Cost of goods sold  143,810,000  206,728,000  --   350,538,000
Gross profit (loss)  69,341,000  (13,613,000)  --   55,728,000
Operating expenses:        
General and administrative  107,602,000  18,719,000  (81,795,000)  44,526,000
Sales and marketing  7,290,000  5,423,000  --   12,713,000
Research and development  1,930,000  698,000  --   2,628,000
Impairment of goodwill and intangible assets  --   84,686,000  --   84,686,000
Total operating expenses  116,822,000  109,526,000  (81,795,000)  144,553,000
Operating loss  (47,481,000)  (123,139,000)  81,795,000  (88,825,000)
Other expense:        
Interest expense, net  12,324,000  12,082,000  --   24,406,000
Loss before income tax (benefit) expense  (59,805,000)  (135,221,000)  81,795,000  (113,231,000)
Income tax (benefit) expense  (21,759,000)  39,000  --   (21,720,000)
         
Net loss  $ (38,046,000)  $ (135,260,000)  $ 81,795,000  $ (91,511,000)
         
(1) MPA includes Motorcar Parts of America, Inc., MVR Products Pte Limited, Unijoh Sdn. Bhd., Motorcar Parts de Mexico, S.A. de C.V., Central Auto Parts Co. Ltd., and Motorcar Parts of Canada, Inc.
         
(2) Fenco includes Fenwick Automotive Products Limited, Introcan, Inc., and Fapco S.A. de C.V.
 
 
MOTORCAR PARTS OF AMERICA, INC.
Consolidating Balance Sheets
March 31, 2013
         
  MPA (1) Fenco (2) Eliminations Consolidated
ASSETS        
Current assets:        
Cash   $ 19,346,000  $ 88,000  $ --   $ 19,434,000
Short-term investments   411,000  --  --  411,000
Accounts receivable — net   3,884,000  12,550,000  (2,123,000)  14,311,000
Inventory— net   33,139,000  29,252,000  (1,301,000)  61,090,000
Inventory unreturned   6,981,000  5,169,000  --  12,150,000
Deferred income taxes   30,075,000  4,810,000  --  34,885,000
Prepaid expenses and other current assets   8,195,000  2,155,000  --  10,350,000
Total current assets   102,031,000  54,024,000  (3,424,000)  152,631,000
 Plant and equipment — net   10,036,000  4,047,000  --  14,083,000
 Investment in Fenco   4,946,000  --  (4,946,000)  --
 Long-term core inventory — net   118,211,000  40,265,000  --  158,476,000
 Long-term core inventory deposits   27,610,000  --  --  27,610,000
 Long-term deferred income taxes   2,546,000  --  --  2,546,000
 Intangible assets — net   3,983,000  --  --  3,983,000
 Other assets   7,723,000  22,000  --  7,745,000
TOTAL ASSETS   $ 277,086,000  $ 98,358,000  $ (8,370,000)  $ 367,074,000
LIABILITIES AND SHAREHOLDERS' EQUITY        
Current liabilities:         
Accounts payable   $ 40,009,000  $ 106,332,000  $ (32,588,000)  $ 113,753,000
Accrued liabilities   9,326,000  5,530,000  --   14,856,000
Customer finished goods returns accrual   14,289,000  10,689,000  --   24,978,000
Other current liabilities   1,192,000  1,817,000  --   3,009,000
Current portion of term loan   3,900,000  --   --   3,900,000
Revolving loan - in default     49,277,000  --   49,277,000
Term loan - in default   --   10,000,000  --   10,000,000
Total current liabilities   68,716,000  183,645,000  (32,588,000)  219,773,000
 Term loan, less current portion   80,110,000  --  --  80,110,000
 Deferred core revenue   12,014,000  --   --   12,014,000
 Debenture loan to MPA   --   52,631,000  (52,631,000)  -- 
 Customer core returns accrual   --   50,414,000  --   50,414,000
 Other liabilities   3,481,000  4,796,000    8,277,000
Total liabilities   164,321,000  291,486,000  (85,219,000)  370,588,000
 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, 20,000,000 shares authorized; 14,460,979 and 12,533,821 shares issued; 14,460,979 and 12,519,421 outstanding at March 31, 2013 and 2012, respectively   145,000  --   --   145,000
Treasury stock, at cost, none at March 31, 2013 and 14,400 shares of common stock at March 31, 2012   --   --   --   -- 
Additional paid-in capital   114,737,000  4,946,000  (4,946,000)  114,737,000
Accumulated other comprehensive loss   (846,000)  --   --   (846,000)
Accumulated deficit   (1,271,000)  (198,074,000)  81,795,000  (117,550,000)
Total shareholders' equity (deficit)   112,765,000  (193,128,000)  76,849,000  (3,514,000)
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $ 277,086,000  $ 98,358,000  $ (8,370,000)  $ 367,074,000
         
         
(1) MPA includes Motorcar Parts of America, Inc., MVR Products Pte Limited, Unijoh Sdn. Bhd., Motorcar Parts de Mexico, S.A. de C.V., Central Auto Parts Co. Ltd., and Motorcar Parts of Canada, Inc.
         
(2) Fenco includes Fenwick Automotive Products Limited, Introcan, Inc., and Fapco S.A. de C.V.

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 fiscal year 2013 and fiscal 2012 fourth quarter and twelve-month period. 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.

Beginning with the first quarter of fiscal year 2012, the Company has begun providing segment information. The two segments are defined as rotating electrical and acquired Fenco products, also referred to as the undercar segment. Income statement information relating to the Company's reportable segments for the three months and twelve months ended March 31, 2013 is as follows:
             
Reconciliation of Non-GAAP Financial Measures         Exhibit 1  
                 
  Three months ended March 31, 2013 (Unaudited)
                 
              Adjusted  
  Rotating Undercar   As Reported  Adjustment    Consolidated  
Income statement Electrical Product Line Eliminations Consolidated  (Non-GAAP)   (1)   (Non-GAAP)   
                 
Net sales  $ 58,042,000  $ 31,294,000  $ --   $ 89,336,000  $ (5,095,000)  (2)   $ 84,241,000  
Cost of goods sold  39,942,000  46,544,000  --   86,486,000  (15,518,000)  (3)   70,968,000  
Gross profit (loss)  18,100,000  (15,250,000)  --   2,850,000  10,423,000    13,273,000  
Gross margin 31.2% -48.7%   3.2%     15.8%  
Operating expenses:                
General and administrative  88,448,000  2,337,000  (81,795,000)  8,990,000  (802,000)  (4)   8,188,000  
Sales and marketing  1,811,000  772,000  --   2,583,000  --     2,583,000  
Research and development  588,000  336,000  --   924,000  (75,000)  (5)   849,000  
Impairment of goodwill and intangible assets  --   84,686,000  --   84,686,000  (84,686,000)    --   
Total operating expenses  90,847,000  88,131,000  (81,795,000)  97,183,000  (85,563,000)    11,620,000  
Operating income (loss)  (72,747,000)  (103,381,000)  81,795,000  (94,333,000)  95,986,000    1,653,000  
Interest expense, net  3,951,000  3,320,000  --   7,271,000  (1,683,000)  (6)   5,588,000 (B)
Income (loss) before income tax expense (benefit)  (76,698,000)  (106,701,000)  81,795,000  (101,604,000)  97,669,000    (3,935,000)  
Income tax expense (benefit)  (27,996,000)  43,000  --   (27,953,000)  30,320,000  (7)   2,367,000 (B)
Net income (loss)  $ (48,702,000)  $ (106,744,000)  $ 81,795,000  $ (73,651,000)  $ 67,349,000    $ (6,302,000) (A)
Undercar product lines not supported         4,230,000  (8)  4,230,000  
Net income (loss) - Adjusted          $ 71,579,000    $ (2,072,000)  
                 
Diluted net income (loss) per share        $ (5.09)  $ 4.66    $ (0.44)  
Undercar product lines not supported          $ 0.29  (8)   $ 0.29  
Diluted net income (loss) per share - Adjusted          $ 4.95    $ (0.14)  
Weighted average number of shares outstanding:                
Diluted       14,462,457 14,462,457   14,462,457  
Depreciation and amortization              1,294,000 (B)
Adjusted EBITDA - Sum of (A) and (B)              $ 2,947,000  
Undercar product lines not supported              4,230,000  
Adjusted EBITDA total              $ 7,177,000  
                 
(1) See following Exhibits for detailed segment analysis of results of operations.            
                 
  Rotating Undercar            
  Electrical Product Line Total          
(2) Contractual customer penalties/unique customer allowances   --   436,000  436,000          
Stock adjustment - sales/warranty adjustment  --   (5,531,000)  (5,531,000)          
Total  --   (5,095,000)  (5,095,000)          
                 
(3) Unusual inventory purchases and freight expenses  --   38,000  38,000          
Stock adjustment - cost of goods sold  --   2,831,000  2,831,000          
Inventory obsolescence/write-down/inefficiency  --   12,649,000  12,649,000          
Total  --   15,518,000  15,518,000          
                 
(4) Financing, severance, professional and other fees  1,402,000  185,000  1,587,000          
Share-based compensation expense  93,000  --   93,000          
Mark-to-market (gain)/loss  (878,000)  --   (878,000)          
Total  617,000  185,000  802,000          
                 
(5) Consulting fees  75,000  --   75,000          
                 
(6) Intersegment interest income for the rotating electrical segment and intersegment interest expense for the Undercar product line segment is $1,513,000, so eliminates in consolidation.  
Reflects $1,683,000 adjustment for one-time bank interest charges related to Fenco.  
(7) Tax effected for Rotating Electrical at 39% tax rate and Undercar product line at 0% tax rate after further adjusting for intercompany interest income and expense.  
(8) Certain Undercar product lines not supported resulted in a loss for the period from January 1, 2013 to March 31, 2013 of $4,230,000 - ($0.29) per share.  
                 
                 
Reconciliation of Non-GAAP Financial Measures             Exhibit 2  
                 
  Twelve months ended March 31, 2013 (Unaudited)
                 
              Adjusted  
  Rotating Undercar   As Reported  Adjustment    Consolidated  
Income statement Electrical Product Line Eliminations Consolidated  (Non-GAAP)   (1)   (Non-GAAP)   
                 
Net sales  $ 213,151,000  $ 193,115,000  $ --   $ 406,266,000  $ (43,806,000)  (2)   $ 362,460,000  
Cost of goods sold  143,810,000  206,728,000  --   350,538,000  (48,536,000)  (3)   302,002,000  
Gross profit (loss)  69,341,000  (13,613,000)  --   55,728,000  4,730,000    60,458,000  
Gross margin 32.5% -7.0%   13.7%     16.7%  
Operating expenses:                
General and administrative  107,602,000  18,719,000  (81,795,000)  44,526,000  (10,828,000)  (4)   33,698,000  
Sales and marketing  7,290,000  5,423,000  --   12,713,000  (747,000)  (5)   11,966,000  
Research and development  1,930,000  698,000  --   2,628,000  (75,000)  (6)   2,553,000  
Impairment of goodwill and intangible assets  --   84,686,000  --   84,686,000  (84,686,000)    --   
Total operating expenses  116,822,000  109,526,000  (81,795,000)  144,553,000  (96,336,000)    48,217,000  
Operating income (loss)  (47,481,000)  (123,139,000)  81,795,000  (88,825,000)  101,066,000    12,241,000  
Interest expense, net  12,324,000  12,082,000  --   24,406,000  (1,683,000)  (7)   22,723,000 (B)
Income (loss) before income tax expense (benefit)  (59,805,000)  (135,221,000)  81,795,000  (113,231,000)  102,749,000    (10,482,000)  
Income tax expense (benefit)  (21,759,000)  39,000  --   (21,720,000)  30,552,000  (8)   8,832,000 (B)
Net income (loss)  $ (38,046,000)  $ (135,260,000)  $ 81,795,000  $ (91,511,000)  $ 72,197,000    $ (19,314,000) (A)
Undercar product lines not supported          7,115,000  (9)  7,115,000  
Net income (loss) - Adjusted          $ 79,312,000    $ (12,199,000)  
                 
Diluted net income (loss) per share        $ (6.39)  $ 5.04    $ (1.35)  
Undercar product lines not supported          $ 0.50  (9)   $ 0.50  
Diluted net income (loss) per share - Adjusted          $ 5.54    $ (0.85)  
Weighted average number of shares outstanding:                
Diluted       14,327,310 14,327,310   14,327,310  
Depreciation and amortization              5,285,000 (B)
Adjusted EBITDA - Sum of (A) and (B)              $ 17,526,000  
Undercar product lines not supported              7,115,000  
Adjusted EBITDA total              $ 24,641,000  
                 
(1) See following Exhibits for detailed segment analysis of results of operations.              
                 
  Rotating Undercar            
  Electrical Product Line Total          
(2) Contractual customer penalties/unique customer allowances   --   4,587,000  4,587,000          
Stock adjustment - sales/warranty adjustment  --   2,390,000  2,390,000          
Core revenue - discontinued customer  --   (50,783,000)  (50,783,000)          
Total  --   (43,806,000)  (43,806,000)          
                 
(3) Third-party warehouse exit termination fees  --   1,402,000  1,402,000          
Severance  --   1,272,000  1,272,000          
Unusual inventory purchases and freight expenses  --   512,000  512,000          
Stock adjustment - cost of goods sold  --   (2,285,000)  (2,285,000)          
Inventory obsolescence/write-down/inefficiency  --   15,986,000  15,986,000          
Core cost of revenue - discontinued customer  --   31,649,000  31,649,000          
Total  --   48,536,000  48,536,000          
                 
(4) Financing, severance, professional and other fees  3,384,000  6,824,000  10,208,000          
Share-based compensation expense  1,010,000  24,000  1,034,000          
Mark-to-market (gain)/loss  (414,000)  --   (414,000)          
Total  3,980,000  6,848,000  10,828,000          
                 
(5) Severance and professional fees  --   747,000  747,000          
                 
(6) Consulting fees  75,000  --   75,000          
                 
(7) Intersegment interest income for the rotating electrical segment and intersegment interest expense for the Undercar product line segment is $5,182,000, so eliminates in consolidation.
Reflects $1,683,000 adjustment for one-time bank interest charges related to Fenco.            
(8) Tax effected for Rotating Electrical at 39% tax rate and Undercar product line at 0% tax rate after further adjusting for intercompany interest income and expense.  
(9) Certain Undercar product lines not supported resulted in a loss for the period from April 1, 2012 to March 31, 2013 of $7,115,000 - ($0.50) per share.
           
           
Reconciliation of Non-GAAP Financial Measures       Exhibit 3  
           
  Three months ended March 31, 2013 (Unaudited)
        Adjusted  
  As Reported     Undercar  
  Undercar Adjustment   Product Line  
Income statement Product Line (Non-GAAP)   (Non-GAAP)  
           
Net sales  $ 31,294,000  $ (5,095,000)  (2)   $ 26,199,000  
Cost of goods sold  46,544,000  (15,518,000)  (3)   31,026,000  
Gross profit (loss)  (15,250,000)  10,423,000    (4,827,000)  
Gross margin -48.7%     -18.4%  (1) 
Operating expenses:          
General and administrative  2,337,000  (185,000)  (4)   2,152,000  
Sales and marketing  772,000  --     772,000  
Research and development  336,000      336,000  
Impairment of goodwill and intangible assets  84,686,000  (84,686,000)    --   
Total operating expenses  88,131,000  (84,871,000)    3,260,000  
Operating income (loss)  (103,381,000)  95,294,000    (8,087,000)  
Interest expense, net  3,320,000  (1,513,000)  (5)   1,807,000 (B)
Income (loss) before income tax expense (benefit)  (106,701,000)  96,807,000    (9,894,000)  
Income tax expense (benefit)  43,000  --   (6)   43,000 (B)
Net income (loss)  $ (106,744,000)  $ 96,807,000    $ (9,937,000) (A)
Undercar product lines not supported        4,230,000  (7) 
Net income (loss) - Adjusted        $ (5,707,000)  
           
Diluted net income (loss) per share        $ (0.69)  
Undercar product lines not supported        $ 0.29  (7) 
Diluted net income (loss) per share - Adjusted        $ (0.39)  
Weighted average number of shares outstanding:          
Diluted       14,462,457  
Depreciation and amortization        582,000 (B)
Adjusted EBITDA - Sum of (A) and (B)        $ (7,505,000)  
Undercar product lines not supported        4,230,000  
Adjusted EBITDA total        $ (3,275,000)  
           
(1) Adjusted further for the impact on gross margins from the loss from Undercar product lines not supported of 16.1%, total gross margin would have been negative (2.3%) for the Undercar product line segment.
           
(2) Contractual customer penalties/unique customer allowances   436,000        
Stock adjustment - sales/warranty adjustment  (5,531,000)        
Total  (5,095,000)        
           
(3) Unusual inventory purchases and freight expenses  38,000        
Stock adjustment - cost of goods sold  2,831,000        
Inventory obsolescence/write-down/inefficiency  12,649,000        
Total  15,518,000        
           
(4) Financing, severance, professional and other fees  185,000        
           
(5) Intersegment interest expense for the Undercar product line segment is $1,513,000.
(6) Tax effected for Undercar product line at 0% tax rate.          
(7) Certain Undercar product lines not supported resulted in a loss for the period from January 1, 2013 to March 31, 2013 of $4,230,000 - ($0.29) per share.
           
           
Reconciliation of Non-GAAP Financial Measures       Exhibit 4  
           
  Twelve months ended March 31, 2013 (Unaudited)
        Adjusted  
  As Reported     Undercar  
  Undercar Adjustment   Product Line  
Income statement Product Line (Non-GAAP)   (Non-GAAP)  
           
Net sales  $ 193,115,000  $ (43,806,000)  (2)   $ 149,309,000  
Cost of goods sold  206,728,000  (48,536,000)  (3)   158,192,000  
Gross profit (loss)  (13,613,000)  4,730,000    (8,883,000)  
Gross margin -7.0%     -5.9%  (1) 
Operating expenses:          
General and administrative  18,719,000  (6,848,000)  (4)   11,871,000  
Sales and marketing  5,423,000  (747,000)  (5)   4,676,000  
Research and development  698,000  --     698,000  
Impairment of goodwill and intangible assets  84,686,000  (84,686,000)    --   
Total operating expenses  109,526,000  (92,281,000)    17,245,000  
Operating income (loss)  (123,139,000)  97,011,000    (26,128,000)  
Interest expense, net  12,082,000  (5,182,000)  (6)   6,900,000 (B)
Income (loss) before income tax expense (benefit)  (135,221,000)  102,193,000    (33,028,000)  
Income tax expense (benefit)  39,000  --   (7)   39,000 (B)
Net income (loss)  $ (135,260,000)  $ 102,193,000    $ (33,067,000) (A)
Undercar product lines not supported        7,115,000  (8) 
Net income (loss) - Adjusted        $ (25,952,000)  
           
Diluted net income (loss) per share        $ (2.31)  
Undercar product lines not supported        $ 0.50  (8) 
Diluted net income (loss) per share - Adjusted        $ (1.81)  
Weighted average number of shares outstanding:          
Diluted       14,327,310  
Depreciation and amortization        2,436,000 (B)
Adjusted EBITDA - Sum of (A) and (B)        $ (23,692,000)  
Undercar product lines not supported        7,115,000  
Adjusted EBITDA total        $ (16,577,000)  
           
(1) Adjusted further for the impact on gross margins from the loss from Undercar product lines not supported of 4.7%, total gross margin would have been negative (1.2%) for the Undercar product line segment.
           
(2) Contractual customer penalties/unique customer allowances   4,587,000        
Stock adjustment - sales/warranty adjustment  2,390,000        
Core revenue - discontinued customer  (50,783,000)        
Total  (43,806,000)        
           
(3) Third-party warehouse exit termination fees  1,402,000        
Severance  1,272,000        
Unusual inventory purchases and freight expenses  512,000        
Stock adjustment - cost of goods sold  (2,285,000)        
Inventory obsolescence/write-down/inefficiency  15,986,000        
Core cost of revenue - discontinued customer  31,649,000        
Total  48,536,000        
           
(4) Financing, severance, professional and other fees  6,824,000        
Share-based compensation expense  24,000        
Total  6,848,000        
           
(5) Severance  747,000        
           
(6) Intersegment interest expense for the Undercar product line segment is $5,182,000.
(7) Tax effected for Undercar product line at 0% tax rate.
(8) Certain Undercar product lines not supported resulted in a loss for the period from April 1, 2012 to March 31, 2013 of $7,115,000 - ($0.50) per share.
           
           
Reconciliation of Non-GAAP Financial Measures       Exhibit 5  
           
  Three months ended March 31, 2013 (Unaudited)
        Adjusted  
  As Reported     Rotating  
  Rotating Adjustment   Electrical  
Income statement Electrical (Non-GAAP)   (Non-GAAP)  
           
Net sales  $ 58,042,000  $ --     $ 58,042,000  
Cost of goods sold  39,942,000  --     39,942,000  
Gross profit  18,100,000  --     18,100,000  
Gross margin 31.2%     31.2%  
Operating expenses:          
General and administrative  88,448,000  (82,412,000)  (1)   6,036,000  
Sales and marketing  1,811,000  --     1,811,000  
Research and development  588,000  (75,000)  (2)   513,000  
Total operating expenses  90,847,000  (82,487,000)    8,360,000  
Operating income (loss)  (72,747,000)  82,487,000    9,740,000  
Interest expense, net  3,951,000  (170,000)  (3)   3,781,000 (B)
Income (loss) before income tax expense (benefit)  (76,698,000)  82,657,000    5,959,000  
Income tax expense (benefit)  (27,996,000)  30,320,000  (4)   2,324,000 (B)
Net income (loss)  $ (48,702,000)  $ 52,337,000    $ 3,635,000 (A)
           
Diluted net income per share        $ 0.26  
Weighted average number of shares outstanding:          
Diluted       14,131,232  (5) 
Depreciation and amortization        712,000 (B)
Adjusted EBITDA - Sum of (A) and (B)        $ 10,452,000  
           
(1) Financing, severance and other fees  1,402,000        
Reserve for Fenco investment  81,795,000        
Share-based compensation expense  93,000        
Mark-to-market (gain)/loss  (878,000)        
Total  82,412,000        
           
(2) Consulting fees  75,000        
           
(3) Intersegment interest income from the Undercar product line segment is $1,513,000
offset by an adjustment for $1,683,000 for one-time bank interest charges related to Fenco.
(4) Tax effected for Rotating Electrical at 39% tax rate.
(5) Excludes the impact of 360,000 shares in connection with the consideration for the May 6, 2011 Fenco acquisition.
           
           
Reconciliation of Non-GAAP Financial Measures       Exhibit 6  
           
  Twelve months ended March 31, 2013 (Unaudited)
        Adjusted  
  As Reported     Rotating  
  Rotating Adjustment   Electrical  
Income statement Electrical (Non-GAAP)   (Non-GAAP)  
           
Net sales  $ 213,151,000  $ --     $ 213,151,000  
Cost of goods sold  143,810,000  --     143,810,000  
Gross profit  69,341,000  --     69,341,000  
Gross margin 32.5%     32.5%  
Operating expenses:          
General and administrative  107,602,000  (85,775,000)  (1)   21,827,000  
Sales and marketing  7,290,000  --     7,290,000  
Research and development  1,930,000  (75,000)  (2)   1,855,000  
Total operating expenses  116,822,000  (85,850,000)    30,972,000  
Operating income (loss)  (47,481,000)  85,850,000    38,369,000  
Interest expense, net  12,324,000  3,499,000  (3)   15,823,000 (B)
Income (loss) before income tax expense (benefit)  (59,805,000)  82,351,000    22,546,000  
Income tax expense (benefit)  (21,759,000)  30,552,000  (4)   8,793,000 (B)
Net income (loss)  $ (38,046,000)  $ 51,799,000    $ 13,753,000 (A)
           
Diluted net income per share        $ 0.98  
Weighted average number of shares outstanding:          
Diluted       13,967,310  (5) 
Depreciation and amortization        2,849,000 (B)
Adjusted EBITDA - Sum of (A) and (B)        $ 41,218,000  
           
(1) Financing, severance and other fees  3,384,000        
Reserve for Fenco investment  81,795,000        
Share-based compensation expense  1,010,000        
Mark-to-market (gain)/loss  (414,000)        
Total  85,775,000        
           
(2) Consulting fees  75,000        
           
(3) Intersegment interest income from the Undercar product line segment is $5,182,000
offset by an adjustment for $1,683,000 for one-time bank interest charges related to Fenco.
(4) Tax effected for Rotating Electrical at 39% tax rate.
(5) Excludes the impact of 360,000 shares in connection with the consideration for the May 6, 2011 Fenco acquisition.
           
           
Reconciliation of Non-GAAP Financial Measures       Exhibit 7  
           
  Three months ended March 31, 2012 (Unaudited)
        Adjusted  
  As Reported     Rotating  
  Rotating Adjustment   Electrical  
Income statement Electrical (Non-GAAP)   (Non-GAAP)  
           
Net sales  $ 51,903,000      $ 51,903,000  
Cost of goods sold  35,054,000      35,054,000  
Gross profit  16,849,000  --     16,849,000  
Gross margin 32.5%     32.5%  
Operating expenses:          
General and administrative  3,812,000  1,253,000  (1)   5,065,000  
Sales and marketing  1,870,000      1,870,000  
Research and development  495,000  --     495,000  
Total operating expenses  6,177,000  1,253,000    7,430,000  
Operating income  10,672,000  (1,253,000)    9,419,000  
Interest expense, net  2,569,000  802,000  (2)   3,371,000 (B)
Income before income tax expense  8,103,000  (2,055,000)    6,048,000  
Income tax expense  2,083,000  276,000  (3)   2,359,000 (B)
Net income  $ 6,020,000  $ (2,331,000)    $ 3,689,000 (A)
           
Diluted net income per share        $ 0.30  
Weighted average number of shares outstanding:          
Diluted       12,278,948  (4) 
Depreciation and amortization        832,000 (B)
Adjusted EBITDA - Sum of (A) and (B)        $ 10,251,000  
           
(1) Fenco, financing, professional and other fees  (330,000)        
Mark-to-market (gain)/loss  (923,000)        
Total  (1,253,000)        
           
(2) Intersegment interest income from the Undercar product line segment is $802,000.
(3) Tax effected for Rotating Electrical at 39% tax rate.
(4) Excludes the impact of 360,000 shares in connection with the consideration for the May 6, 2011 Fenco acquisition.
           
           
Reconciliation of Non-GAAP Financial Measures       Exhibit 8  
           
  Twelve months ended March 31, 2012 (Unaudited)
        Adjusted  
  As Reported     Rotating  
  Rotating Adjustment   Electrical  
Income statement Electrical (Non-GAAP)   (Non-GAAP)  
           
Net sales  $ 180,404,000  $ (1,853,000)  (1)   $ 178,551,000  
Cost of goods sold  123,072,000  --     123,072,000  
Gross profit  57,332,000  (1,853,000)    55,479,000  
Gross margin 31.8%     31.1%  
Operating expenses:          
General and administrative  20,621,000  (2,970,000)  (2)   17,651,000  
Sales and marketing  7,659,000  (238,000)  (3)   7,421,000  
Research and development  1,765,000  --     1,765,000  
Acquisition costs  713,000  (713,000)  (4)   --   
Total operating expenses  30,758,000  (3,921,000)    26,837,000  
Operating income  26,574,000  2,068,000    28,642,000  
Interest expense, net  4,841,000  2,529,000  (5)   7,370,000 (B)
Income before income tax expense  21,733,000  (461,000)    21,272,000  
Income tax expense  7,433,000  864,000  (6)   8,296,000 (B)
Net income  $ 14,300,000  $ (1,325,000)    $ 12,976,000 (A)
           
Diluted net income per share        $ 1.04  
Weighted average number of shares outstanding:          
Diluted       12,429,756  (7) 
Depreciation and amortization        3,466,000 (B)
Adjusted EBITDA - Sum of (A) and (B)        $ 32,108,000  
           
(1) Intersegment revenue, net of cost of goods sold  1,853,000        
           
(2) Fenco, financing, professional and other fees  2,494,000        
Mark-to-market (gain)/loss  476,000        
Total  2,970,000        
           
(3) Fenco related sales and marketing expenses  238,000        
           
(4) Fenco related acquisition costs  713,000        
           
(5) Intersegment interest income from the Undercar product line segment is $2,529,000
(6) Tax effected for Rotating Electrical at 39% tax rate.
(7) Excludes the impact of 324,590 shares in connection with the consideration for the May 6, 2011 Fenco acquisition.
CONTACT: Gary S. Maier         Maier & Company, Inc.         (310) 471-1288

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