☑ | 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) |
Title of each class | Trading symbol(s) | Name of each exchange on which registered |
Common Stock, par value $0.01 per share | MPAA | The Nasdaq Global Select Market |
Large accelerated filer ☐ | Accelerated filer ☑ |
Non-accelerated filer ☐ | Smaller reporting company ☐ |
Emerging growth company ☐ |
PART I — FINANCIAL INFORMATION | ||
4 | ||
4 | ||
5 | ||
6 | ||
7 | ||
8 | ||
9 | ||
PART II — OTHER INFORMATION | ||
32 | ||
Item 1. | Financial Statements |
June 30, 2022 | March 31, 2022 | June 30, 2023 | March 31, 2023 | |||||||||||||
ASSETS | (Unaudited) | (Unaudited) | ||||||||||||||
Current assets: | ||||||||||||||||
Cash and cash equivalents | $ | 9,217,000 | $ | 23,016,000 | $ | 10,887,000 | $ | 11,596,000 | ||||||||
Short-term investments | 1,995,000 | 2,202,000 | 2,159,000 | 2,011,000 | ||||||||||||
Accounts receivable — net | 73,030,000 | 85,075,000 | 146,645,000 | 119,868,000 | ||||||||||||
Inventory | 405,205,000 | 385,504,000 | 364,187,000 | 356,254,000 | ||||||||||||
Contract assets | 27,783,000 | 27,500,000 | 27,732,000 | 25,443,000 | ||||||||||||
Prepaid expenses and other current assets | 11,705,000 | 13,688,000 | 20,566,000 | 22,306,000 | ||||||||||||
Total current assets | 528,935,000 | 536,985,000 | 572,176,000 | 537,478,000 | ||||||||||||
Plant and equipment — net | 49,384,000 | 51,062,000 | 44,244,000 | 46,052,000 | ||||||||||||
Operating lease assets | 80,157,000 | 81,997,000 | 88,760,000 | 87,619,000 | ||||||||||||
Long-term deferred income taxes | 27,046,000 | 26,982,000 | 32,417,000 | 32,625,000 | ||||||||||||
Long-term contract assets | 306,953,000 | 310,255,000 | 314,463,000 | 318,381,000 | ||||||||||||
Goodwill and intangible assets — net | 6,548,000 | 7,004,000 | 5,046,000 | 5,348,000 | ||||||||||||
Other assets | 1,403,000 | 1,413,000 | 1,081,000 | 1,062,000 | ||||||||||||
TOTAL ASSETS | $ | 1,000,426,000 | $ | 1,015,698,000 | $ | 1,058,187,000 | $ | 1,028,565,000 | ||||||||
LIABILITIES AND SHAREHOLDERS�� EQUITY | ||||||||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||
Current liabilities: | ||||||||||||||||
Accounts payable and accrued liabilities | $ | 173,818,000 | $ | 168,435,000 | $ | 142,965,000 | $ | 141,766,000 | ||||||||
Customer finished goods returns accrual | 28,793,000 | 38,086,000 | 33,378,000 | 37,984,000 | ||||||||||||
Contract liabilities | 43,645,000 | 42,496,000 | 49,003,000 | 40,340,000 | ||||||||||||
Revolving loan | 146,000,000 | 155,000,000 | 167,000,000 | 145,200,000 | ||||||||||||
Other current liabilities | 11,279,000 | 11,930,000 | 5,170,000 | 4,871,000 | ||||||||||||
Operating lease liabilities | 6,653,000 | 6,788,000 | 8,914,000 | 8,767,000 | ||||||||||||
Current portion of term loan | 3,670,000 | 3,670,000 | 12,020,000 | 3,664,000 | ||||||||||||
Total current liabilities | 413,858,000 | 426,405,000 | 418,450,000 | 382,592,000 | ||||||||||||
Term loan, less current portion | 12,097,000 | 13,024,000 | - | 9,279,000 | ||||||||||||
Convertible notes, related party | 31,252,000 | 30,994,000 | ||||||||||||||
Long-term contract liabilities | 173,045,000 | 172,764,000 | 194,708,000 | 193,606,000 | ||||||||||||
Long-term deferred income taxes | 121,000 | 126,000 | 1,985,000 | 718,000 | ||||||||||||
Long-term operating lease liabilities | 79,552,000 | 80,803,000 | 77,013,000 | 79,318,000 | ||||||||||||
Other liabilities | 6,987,000 | 7,313,000 | 11,340,000 | 11,583,000 | ||||||||||||
Total liabilities | 685,660,000 | 700,435,000 | 734,748,000 | 708,090,000 | ||||||||||||
Commitments and contingencies | ||||||||||||||||
Shareholders’ equity: | ||||||||||||||||
Preferred stock; par value $0.01 per share, 5,000,000 shares authorized; NaN issued | 0 | 0 | ||||||||||||||
Series A junior participating preferred stock; par value $0.01 per share, 20,000 shares authorized; NaN issued | 0 | 0 | ||||||||||||||
Common stock; par value $0.01 per share, 50,000,000 shares authorized; 19,214,978 and 19,104,751 shares issued and outstanding at June 30, 2022 and March 31, 2022, respectively | 192,000 | 191,000 | ||||||||||||||
Preferred stock; par value $0.01 per share, 5,000,000 shares authorized; none issued | - | - | ||||||||||||||
Series A junior participating preferred stock; par value $0.01 per share, 20,000 shares authorized; none issued | - | - | ||||||||||||||
Common stock; par value $0.01 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 | 227,729,000 | 227,184,000 | 232,866,000 | 231,836,000 | ||||||||||||
Retained earnings | 92,779,000 | 92,954,000 | 87,337,000 | 88,747,000 | ||||||||||||
Accumulated other comprehensive loss | (5,934,000 | ) | (5,066,000 | ) | ||||||||||||
Accumulated other comprehensive income (loss) | 3,040,000 | (303,000 | ) | |||||||||||||
Total shareholders’ equity | 314,766,000 | 315,263,000 | 323,439,000 | 320,475,000 | ||||||||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 1,000,426,000 | $ | 1,015,698,000 | $ | 1,058,187,000 | $ | 1,028,565,000 |
Three Months Ended | ||||||||||||||||
Three Months Ended June 30, | June 30, | |||||||||||||||
2022 | 2021 | 2023 | 2022 | |||||||||||||
Net sales | $ | 163,985,000 | $ | 149,034,000 | $ | 159,705,000 | $ | 163,985,000 | ||||||||
Cost of goods sold | 133,683,000 | 125,463,000 | 133,138,000 | 133,683,000 | ||||||||||||
Gross profit | 30,302,000 | 23,571,000 | 26,567,000 | 30,302,000 | ||||||||||||
Operating expenses: | ||||||||||||||||
General and administrative | 13,634,000 | 12,486,000 | 12,602,000 | 13,634,000 | ||||||||||||
Sales and marketing | 5,542,000 | 5,368,000 | 5,419,000 | 5,542,000 | ||||||||||||
Research and development | 3,113,000 | 2,501,000 | 2,375,000 | 3,113,000 | ||||||||||||
Foreign exchange impact of lease liabilities and forward contracts | 678,000 | (2,533,000 | ) | (4,270,000 | ) | 678,000 | ||||||||||
Total operating expenses | 22,967,000 | 17,822,000 | 16,126,000 | 22,967,000 | ||||||||||||
Operating income | 7,335,000 | 5,749,000 | 10,441,000 | 7,335,000 | ||||||||||||
Other expenses: | ||||||||||||||||
Interest expense, net | 6,921,000 | 3,941,000 | 11,720,000 | 6,921,000 | ||||||||||||
Income before income tax expense | 414,000 | 1,808,000 | ||||||||||||||
Income tax expense | 589,000 | 947,000 | ||||||||||||||
Net (loss) income | $ | (175,000 | ) | $ | 861,000 | |||||||||||
Basic net (loss) income per share | $ | (0.01 | ) | $ | 0.05 | |||||||||||
Diluted net (loss) income per share | $ | (0.01 | ) | $ | 0.04 | |||||||||||
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 | 19,123,354 | 19,054,481 | 19,508,626 | 19,123,354 | ||||||||||||
Diluted | 19,123,354 | 19,659,057 | 19,508,626 | 19,123,354 |
Three Months Ended June 30, | ||||||||
2022 | 2021 | |||||||
Net (loss) income | $ | (175,000 | ) | $ | 861,000 | |||
Other comprehensive (loss) income, net of tax: | ||||||||
Foreign currency translation (loss) gain | (868,000 | ) | 1,833,000 | |||||
Total other comprehensive (loss) income, net of tax | (868,000 | ) | 1,833,000 | |||||
Comprehensive (loss) income | $ | (1,043,000 | ) | $ | 2,694,000 |
Three Months Ended | ||||||||
June 30, | ||||||||
2023 | 2022 | |||||||
Net loss | $ | (1,410,000 | ) | $ | (175,000 | ) | ||
Other comprehensive income (loss), net of tax: | ||||||||
Foreign currency translation gain (loss) | 3,343,000 | (868,000 | ) | |||||
Total other comprehensive income (loss), net of tax | 3,343,000 | (868,000 | ) | |||||
Comprehensive income (loss) | $ | 1,933,000 | $ | (1,043,000 | ) |
Common Stock | Common Stock | |||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive (Loss) Income | Total | Shares | Amount | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total | |||||||||||||||||||||||||||||||||||||
Balance at March 31, 2022 | 19,104,751 | $ | 191,000 | $ | 227,184,000 | $ | 92,954,000 | $ | (5,066,000 | ) | $ | 315,263,000 | ||||||||||||||||||||||||||||||||||||
Balance at March 31, 2023 | 19,494,615 | $ | 195,000 | $ | 231,836,000 | $ | 88,747,000 | $ | (303,000 | ) | $ | 320,475,000 | ||||||||||||||||||||||||||||||||||||
Compensation recognized under employee stock plans | - | 0 | 1,249,000 | 0 | 0 | 1,249,000 | - | - | 1,310,000 | - | - | 1,310,000 | ||||||||||||||||||||||||||||||||||||
Exercise of stock options, net of shares withheld for employee taxes | 25,543 | 0 | 191,000 | 0 | 0 | 191,000 | ||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock upon vesting of RSUs, net of shares withheld for employee taxes | 84,684 | 1,000 | (895,000 | ) | 0 | 0 | (894,000 | ) | 104,530 | 1,000 | (280,000 | ) | - | - | (279,000 | ) | ||||||||||||||||||||||||||||||||
Foreign currency translation | - | 0 | 0 | 0 | (868,000 | ) | (868,000 | ) | - | - | - | - | 3,343,000 | 3,343,000 | ||||||||||||||||||||||||||||||||||
Net loss | - | 0 | 0 | (175,000 | ) | 0 | (175,000 | ) | - | - | - | (1,410,000 | ) | - | (1,410,000 | ) | ||||||||||||||||||||||||||||||||
Balance at June 30, 2022 | 19,214,978 | $ | 192,000 | $ | 227,729,000 | $ | 92,779,000 | $ | (5,934,000 | ) | $ | 314,766,000 | ||||||||||||||||||||||||||||||||||||
Balance at June 30, 2023 | 19,599,145 | $ | 196,000 | $ | 232,866,000 | $ | 87,337,000 | $ | 3,040,000 | $ | 323,439,000 |
Common Stock | Common Stock | |||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive (Loss) Income | Total | Shares | Amount | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total | |||||||||||||||||||||||||||||||||||||
Balance at March 31,2021 | 19,045,386 | $ | 190,000 | $ | 223,058,000 | $ | 85,593,000 | $ | (7,696,000 | ) | $ | 301,145,000 | ||||||||||||||||||||||||||||||||||||
Balance at March 31,2022 | 19,104,751 | $ | 191,000 | $ | 227,184,000 | $ | 92,954,000 | $ | (5,066,000 | ) | $ | 315,263,000 | ||||||||||||||||||||||||||||||||||||
Compensation recognized under employee stock plans | - | 0 | 1,576,000 | 0 | 0 | 1,576,000 | - | - | 1,249,000 | - | - | 1,249,000 | ||||||||||||||||||||||||||||||||||||
Exercise of stock options, net of shares withheld for employee taxes | 19,837 | 0 | 354,000 | 0 | 0 | 354,000 | 25,543 | - | 191,000 | - | - | 191,000 | ||||||||||||||||||||||||||||||||||||
Issuance of common stock upon vesting of RSUs, net of shares withheld for employee taxes | 35,869 | 1,000 | (543,000 | ) | 0 | 0 | (542,000 | ) | 84,684 | 1,000 | (895,000 | ) | - | - | (894,000 | ) | ||||||||||||||||||||||||||||||||
Foreign currency translation | - | 0 | 0 | 0 | 1,833,000 | 1,833,000 | - | - | - | - | (868,000 | ) | (868,000 | ) | ||||||||||||||||||||||||||||||||||
Net income | - | 0 | 0 | 861,000 | 0 | 861,000 | ||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2021 | 19,101,092 | $ | 191,000 | $ | 224,445,000 | $ | 86,454,000 | $ | (5,863,000 | ) | $ | 305,227,000 | ||||||||||||||||||||||||||||||||||||
Net loss | - | - | - | (175,000 | ) | - | (175,000 | ) | ||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2022 | 19,214,978 | $ | 192,000 | $ | 227,729,000 | $ | 92,779,000 | $ | (5,934,000 | ) | $ | 314,766,000 |
Three Months Ended | ||||||||||||||||
Three Months Ended June 30, | June 30, | |||||||||||||||
2022 | 2021 | 2023 | 2022 | |||||||||||||
Cash flows from operating activities: | ||||||||||||||||
Net (loss) income | $ | (175,000 | ) | $ | 861,000 | |||||||||||
Adjustments to reconcile net (loss) income to net cash used in operating activities: | ||||||||||||||||
Net loss | $ | (1,410,000 | ) | $ | (175,000 | ) | ||||||||||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||||||
Depreciation and amortization | 3,124,000 | 3,145,000 | 3,033,000 | 3,124,000 | ||||||||||||
Amortization of interest | 306,000 | 414,000 | 713,000 | 306,000 | ||||||||||||
Accrued interest on convertible notes, related party | 800,000 | - | ||||||||||||||
Amortization of core premiums paid to customers | 2,863,000 | 2,531,000 | 2,490,000 | 2,863,000 | ||||||||||||
Amortization of finished goods premiums paid to customers | 181,000 | 146,000 | 167,000 | 181,000 | ||||||||||||
Noncash lease expense | 1,939,000 | 1,791,000 | 2,504,000 | 1,939,000 | ||||||||||||
Gain due to the change in the fair value of the contingent consideration | 0 | (60,000 | ) | |||||||||||||
Foreign exchange impact of lease liabilities and forward contracts | 678,000 | (2,533,000 | ) | (4,270,000 | ) | 678,000 | ||||||||||
Loss (gain) on short-term investments | 294,000 | (5,000 | ) | |||||||||||||
Change in fair value of compound net derivative liability | 140,000 | - | ||||||||||||||
(Gain) loss on short-term investments | (121,000 | ) | 294,000 | |||||||||||||
Net provision for inventory reserves | 3,942,000 | 3,141,000 | 3,366,000 | 3,942,000 | ||||||||||||
Net provision for customer payment discrepancies and credit losses | 300,000 | 229,000 | 1,159,000 | 300,000 | ||||||||||||
Deferred income taxes | (62,000 | ) | 358,000 | 1,595,000 | (62,000 | ) | ||||||||||
Share-based compensation expense | 1,249,000 | 1,576,000 | 1,310,000 | 1,249,000 | ||||||||||||
Loss on disposal of plant and equipment | 9,000 | 33,000 | 1,000 | 9,000 | ||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||
Accounts receivable | 11,427,000 | 9,020,000 | (27,518,000 | ) | 11,427,000 | |||||||||||
Inventory | (24,252,000 | ) | (20,625,000 | ) | (10,782,000 | ) | (24,252,000 | ) | ||||||||
Prepaid expenses and other current assets | 1,122,000 | 281,000 | 2,391,000 | 1,122,000 | ||||||||||||
Other assets | 6,000 | 297,000 | 16,000 | 6,000 | ||||||||||||
Accounts payable and accrued liabilities | 5,898,000 | (10,183,000 | ) | 927,000 | 5,898,000 | |||||||||||
Customer finished goods returns accrual | (9,289,000 | ) | 3,698,000 | (4,679,000 | ) | (9,289,000 | ) | |||||||||
Contract assets, net | (37,000 | ) | (24,857,000 | ) | ||||||||||||
Contract liabilities, net | 1,384,000 | 27,880,000 | ||||||||||||||
Contract assets | (792,000 | ) | (37,000 | ) | ||||||||||||
Contract liabilities | 9,320,000 | 1,384,000 | ||||||||||||||
Operating lease liabilities | (1,446,000 | ) | (1,259,000 | ) | (1,863,000 | ) | (1,446,000 | ) | ||||||||
Other liabilities | (443,000 | ) | (618,000 | ) | 1,033,000 | (443,000 | ) | |||||||||
Net cash used in operating activities | (982,000 | ) | (4,739,000 | ) | (20,470,000 | ) | (982,000 | ) | ||||||||
Cash flows from investing activities: | ||||||||||||||||
Purchase of plant and equipment | (1,375,000 | ) | (1,922,000 | ) | (40,000 | ) | (1,375,000 | ) | ||||||||
Purchase of short-term investments | (86,000 | ) | (167,000 | ) | (27,000 | ) | (86,000 | ) | ||||||||
Net cash used in investing activities | (1,461,000 | ) | (2,089,000 | ) | (67,000 | ) | (1,461,000 | ) | ||||||||
Cash flows from financing activities: | ||||||||||||||||
Borrowings under revolving loan | 13,000,000 | 32,000,000 | 26,000,000 | 13,000,000 | ||||||||||||
Repayments of revolving loan | (22,000,000 | ) | (13,000,000 | ) | (4,200,000 | ) | (22,000,000 | ) | ||||||||
Repayments of term loan | (938,000 | ) | (938,000 | ) | (938,000 | ) | (938,000 | ) | ||||||||
Payments for debt issuance costs | (21,000 | ) | (1,102,000 | ) | (418,000 | ) | (21,000 | ) | ||||||||
Payments on finance lease obligations | (604,000 | ) | (678,000 | ) | (492,000 | ) | (604,000 | ) | ||||||||
Exercise of stock options | 191,000 | 354,000 | ||||||||||||||
Exercise of stock options, net of cash used to pay employee taxes | - | 191,000 | ||||||||||||||
Cash used to net share settle equity awards | (894,000 | ) | (542,000 | ) | (279,000 | ) | (894,000 | ) | ||||||||
Net cash (used in) provided by financing activities | (11,266,000 | ) | 16,094,000 | |||||||||||||
Net cash provided by (used in) financing activities | 19,673,000 | (11,266,000 | ) | |||||||||||||
Effect of exchange rate changes on cash and cash equivalents | (90,000 | ) | 94,000 | 155,000 | (90,000 | ) | ||||||||||
Net (decrease) increase in cash and cash equivalents | (13,799,000 | ) | 9,360,000 | |||||||||||||
Net decrease in cash and cash equivalents | (709,000 | ) | (13,799,000 | ) | ||||||||||||
Cash and cash equivalents — Beginning of period | 23,016,000 | 15,523,000 | 11,596,000 | 23,016,000 | ||||||||||||
Cash and cash equivalents — End of period | $ | 9,217,000 | $ | 24,883,000 | $ | 10,887,000 | $ | 9,217,000 | ||||||||
Supplemental disclosures of cash flow information: | ||||||||||||||||
Cash paid for interest, net | $ | 6,548,000 | $ | 3,521,000 | $ | 10,120,000 | $ | 6,548,000 | ||||||||
Cash paid for income taxes, net of refunds | 712,000 | 1,550,000 | 645,000 | 712,000 | ||||||||||||
Cash paid for operating leases | 2,647,000 | 2,472,000 | 3,081,000 | 2,647,000 | ||||||||||||
Cash paid for finance leases | 672,000 | 775,000 | 554,000 | 672,000 | ||||||||||||
Plant and equipment acquired under finance leases | 75,000 | 230,000 | 31,000 | 75,000 | ||||||||||||
Assets acquired under operating leases | 144,000 | 15,718,000 | - | 144,000 | ||||||||||||
Non-cash capital expenditures | 401,000 | 206,000 | - | 401,000 | ||||||||||||
Debt issuance costs included in accounts payable and accrued liabilities | 187,000 | - |
June 30, 2022 | March 31, 2022 | |||||||
Accounts receivable — trade | $ | 94,087,000 | $ | 98,734,000 | ||||
Allowance for credit losses | (231,000 | ) | (375,000 | ) | ||||
Customer payment discrepancies | (1,418,000 | ) | (1,375,000 | ) | ||||
Customer returns RGA issued | (19,408,000 | ) | (11,909,000 | ) | ||||
Total accounts receivable — net | $ | 73,030,000 | $ | 85,075,000 |
June 30, 2023 | March 31, 2023 | |||||||
Accounts receivable — trade | $ | 165,486,000 | $ | 136,076,000 | ||||
Allowance for credit losses | (303,000 | ) | (339,000 | ) | ||||
Customer payment discrepancies | (2,076,000 | ) | (1,634,000 | ) | ||||
Customer returns RGA issued | (16,462,000 | ) | (14,235,000 | ) | ||||
Total accounts receivable — net | $ | 146,645,000 | $ | 119,868,000 |
Three Months Ended June 30, | ||||||||
2022 | 2021 | |||||||
Balance at beginning of period | $ | 375,000 | $ | 348,000 | ||||
Provision for expected credit losses | 12,000 | (36,000 | ) | |||||
Recoveries | 0 | 0 | ||||||
Amounts written off charged against the allowance | (156,000 | ) | (39,000 | ) | ||||
Balance at end of period | $ | 231,000 | $ | 273,000 |
June 30, 2022 | March 31, 2022 | |||||||
Inventory | ||||||||
Raw materials | $ | 146,775,000 | $ | 150,414,000 | ||||
Work-in-process | 6,357,000 | 6,880,000 | ||||||
Finished goods | 248,332,000 | 226,729,000 | ||||||
401,464,000 | 384,023,000 | |||||||
Less allowance for excess and obsolete inventory | (12,704,000 | ) | (13,520,000 | ) | ||||
Inventory — net | 388,760,000 | 370,503,000 | ||||||
Inventory unreturned | 16,445,000 | 15,001,000 | ||||||
Total inventory | $ | 405,205,000 | $ | 385,504,000 |
June 30, 2023 | March 31, 2023 | |||||||
Inventory | ||||||||
Raw materials | $ | 149,545,000 | $ | 147,880,000 | ||||
Work-in-process | 10,097,000 | 7,033,000 | ||||||
Finished goods | 202,874,000 | 201,198,000 | ||||||
362,516,000 | 356,111,000 | |||||||
Less allowance for excess and obsolete inventory | (16,412,000 | ) | (16,436,000 | ) | ||||
Inventory — net | 346,104,000 | 339,675,000 | ||||||
Inventory unreturned | 18,083,000 | 16,579,000 | ||||||
Total inventory | $ | 364,187,000 | $ | 356,254,000 |
June 30, 2022 | March 31, 2022 | |||||||
Short-term contract assets | ||||||||
Cores expected to be returned by customers | $ | 16,658,000 | $ | 15,778,000 | ||||
Upfront payments to customers | 460,000 | 517,000 | ||||||
Finished goods premiums paid to customers | 573,000 | 584,000 | ||||||
Core premiums paid to customers | 10,092,000 | 10,621,000 | ||||||
Total short-term contract assets | $ | 27,783,000 | $ | 27,500,000 | ||||
Remanufactured cores held at customers’ locations | $ | 257,379,000 | $ | 258,376,000 | ||||
Upfront payments to customers | 122,000 | 210,000 | ||||||
Finished goods premiums paid to customers | 2,685,000 | 2,806,000 | ||||||
Core premiums paid to customers | 41,198,000 | 43,294,000 | ||||||
Long-term core inventory deposits | 5,569,000 | 5,569,000 | ||||||
Total long-term contract assets | $ | 306,953,000 | $ | 310,255,000 |
June 30, 2023 | March 31, 2023 | |||||||
Short-term contract assets | ||||||||
Cores expected to be returned by customers | $ | 15,915,000 | $ | 13,463,000 | ||||
Core premiums paid to customers | 9,775,000 | 9,812,000 | ||||||
Upfront payments to customers | 1,458,000 | 1,593,000 | ||||||
Finished goods premiums paid to customers | 584,000 | 575,000 | ||||||
Total short-term contract assets | $ | 27,732,000 | $ | 25,443,000 | ||||
Remanufactured cores held at customers’ locations | $ | 268,906,000 | $ | 271,628,000 | ||||
Core premiums paid to customers | 36,401,000 | 38,310,000 | ||||||
Long-term core inventory deposits | 5,569,000 | 5,569,000 | ||||||
Finished goods premiums paid to customers | 2,651,000 | 2,530,000 | ||||||
Upfront payments to customers | 936,000 | 344,000 | ||||||
Total long-term contract assets | $ | 314,463,000 | $ | 318,381,000 |
Three Months Ended June 30, | ||||||||
2022 | 2021 | |||||||
Net sales | ||||||||
Customer A | 37 | % | 34 | % | ||||
Customer B | 25 | % | 20 | % | ||||
Customer C | 20 | % | 31 | % |
Three Months Ended | ||||||||
June 30, | ||||||||
2023 | 2022 | |||||||
Net sales | ||||||||
Customer A | 34 | % | 37 | % | ||||
Customer C | 28 | % | 20 | % | ||||
Customer B | 20 | % | 25 | % | ||||
Customer D | 5 | % | 4 | % |
June 30, 2022 | March 31,2022 | |||||||
Accounts receivable - trade | ||||||||
Customer A | 43 | % | 42 | % | ||||
Customer B | 22 | % | 21 | % | ||||
Customer C | 0 | % | 9 | % |
June 30, 2023 | March 31, 2023 | |||||||
Accounts receivable - trade | ||||||||
Customer A | 34 | % | 33 | % | ||||
Customer C | 30 | % | 21 | % | ||||
Customer B | 15 | % | 18 | % | ||||
Customer D | 8 | % | 12 | % |
Three Months Ended June 30, | ||||||||
2022 | 2021 | |||||||
Product line | ||||||||
Rotating electrical products | 67 | % | 67 | % | ||||
Wheel hub products | 12 | % | 14 | % | ||||
Brake-related products | 17 | % | 16 | % | ||||
Other products | 4 | % | 3 | % | ||||
100 | % | 100 | % |
Three Months Ended | ||||||||
June 30, | ||||||||
2023 | 2022 | |||||||
Product line | ||||||||
Rotating electrical products | 64 | % | 67 | % | ||||
Brake-related products | 22 | % | 17 | % | ||||
Wheel hub products | 11 | % | 12 | % | ||||
Other products | 3 | % | 4 | % | ||||
| 100 | % | 100 | % |
June 30, 2022 | March 31, 2022 | June 30, 2023 | March 31, 2023 | |||||||||||||
Principal amount of Term Loans | $ | 15,937,000 | $ | 16,875,000 | $ | 12,187,000 | $ | 13,125,000 | ||||||||
Unamortized financing fees | (170,000 | ) | (181,000 | ) | (167,000 | ) | (182,000 | ) | ||||||||
Net carrying amount of Term Loans | 15,767,000 | 16,694,000 | 12,020,000 | 12,943,000 | ||||||||||||
Less current portion of Term Loans | (3,670,000 | ) | (3,670,000 | ) | (12,020,000 | ) | (3,664,000 | ) | ||||||||
Long-term portion of Term Loans | $ | 12,097,000 | $ | 13,024,000 | $ | - | $ | 9,279,000 |
Year Ending March 31, | ||||
2023 - remaining nine months | $ | 2,812,000 | ||
2024 | 3,750,000 | |||
2025 | 3,750,000 | |||
2026 | 3,750,000 | |||
2027 | 1,875,000 | |||
Total payments | $ | 15,937,000 |
June 30, 2023 | March 31, 2023 | |||||||
Principal amount of Convertible Notes | $ | 32,000,000 | $ | 32,000,000 | ||||
Less: unamortized debt discount attributed to Compound Net Derivative Liability | (8,229,000 | ) | (8,430,000 | ) | ||||
Less: unamortized debt discount attributed to debt issuance costs | (1,089,000 | ) | (1,006,000 | ) | ||||
Carrying amount of the Convertible Notes | 22,682,000 | 22,564,000 | ||||||
Plus: Compound Net Derivative Liability | 8,570,000 | 8,430,000 | ||||||
Net carrying amount of Convertible Notes, related party | $ | 31,252,000 | $ | 30,994,000 |
Three Months Ended | ||||
June 30, | ||||
2023 | ||||
Contractual interest expense | $ | 800,000 | ||
Accretion of debt discount | 201,000 | |||
Amortization of issuance costs | 27,000 | |||
Total interest expense | $ | 1,028,000 |
June 30, 2022 | March 31, 2022 | |||||||
Short-term contract liabilities | ||||||||
Customer core returns accruals | $ | 17,533,000 | $ | 12,322,000 | ||||
Customer allowances earned | 18,698,000 | 22,018,000 | ||||||
Customer deposits | 2,507,000 | 3,306,000 | ||||||
Finished goods liabilities | 1,582,000 | 1,537,000 | ||||||
Core bank liability | 1,647,000 | 1,634,000 | ||||||
Accrued core payment | 1,678,000 | 1,679,000 | ||||||
Total short-term contract liabilities | $ | 43,645,000 | $ | 42,496,000 | ||||
Long-term contract liabilities | ||||||||
Customer core returns accruals | $ | 156,153,000 | $ | 154,940,000 | ||||
Customer allowances earned | 0 | 41,000 | ||||||
Finished goods liabilities | 1,202,000 | 1,588,000 | ||||||
Core bank liability | 14,851,000 | 15,267,000 | ||||||
Accrued core payment | 839,000 | 928,000 | ||||||
Total long-term contract liabilities | $ | 173,045,000 | $ | 172,764,000 |
June 30, 2023 | March 31, 2023 | |||||||
Short-term contract liabilities | ||||||||
Customer allowances earned | $ | 23,518,000 | $ | 19,997,000 | ||||
Customer core returns accruals | 16,259,000 | 11,112,000 | ||||||
Accrued core payment | 3,141,000 | 3,056,000 | ||||||
Customer deposits | 3,037,000 | 3,232,000 | ||||||
Core bank liability | 1,699,000 | 1,686,000 | ||||||
Finished goods liabilities | 1,349,000 | 1,257,000 | ||||||
Total short-term contract liabilities | $ | 49,003,000 | $ | 40,340,000 | ||||
Long-term contract liabilities | ||||||||
Customer core returns accruals | $ | 171,982,000 | $ | 170,420,000 | ||||
Core bank liability | 13,152,000 | 13,582,000 | ||||||
Accrued core payment | 9,213,000 | 9,171,000 | ||||||
Finished goods liabilities | 361,000 | 433,000 | ||||||
Total long-term contract liabilities | $ | 194,708,000 | $ | 193,606,000 |
Leases | Classification | June 30, 2022 | March 31, 2022 | |||||||
Assets: | ||||||||||
Operating | Operating lease assets | $ | 80,157,000 | $ | 81,997,000 | |||||
Finance | Plant and equipment | 7,027,000 | 7,470,000 | |||||||
Total leased assets | $ | 87,184,000 | $ | 89,467,000 | ||||||
Liabilities: | ||||||||||
Current | ||||||||||
Operating | Operating lease liabilities | $ | 6,653,000 | $ | 6,788,000 | |||||
Finance | Other current liabilities | 2,185,000 | 2,330,000 | |||||||
Long-term | ||||||||||
Operating | Long-term operating lease liabilities | 79,552,000 | 80,803,000 | |||||||
Finance | Other liabilities | 3,035,000 | 3,425,000 | |||||||
Total lease liabilities | $ | 91,425,000 | $ | 93,346,000 |
Leases | Classification | June 30, 2023 | March 31, 2023 | |||||||
Assets: | ||||||||||
Operating | Operating lease assets | $ | 88,760,000 | $ | 87,619,000 | |||||
Finance | Plant and equipment | 5,001,000 | 5,549,000 | |||||||
Total leased assets | $ | 93,761,000 | $ | 93,168,000 | ||||||
Liabilities: | ||||||||||
Current | ||||||||||
Operating | Operating lease liabilities | $ | 8,914,000 | $ | 8,767,000 | |||||
Finance | Other current liabilities | 1,802,000 | 1,851,000 | |||||||
Long-term | ||||||||||
Operating | Long-term operating lease liabilities | 77,013,000 | 79,318,000 | |||||||
Finance | Other liabilities | 2,333,000 | 2,742,000 | |||||||
Total lease liabilities | $ | 90,062,000 | $ | 92,678,000 |
Three Months Ended June 30, | ||||||||
2022 | 2021 | |||||||
Lease cost | ||||||||
Operating lease cost | $ | 3,165,000 | $ | 3,042,000 | ||||
Short-term lease cost | 454,000 | 376,000 | ||||||
Variable lease cost | 185,000 | 281,000 | ||||||
Finance lease cost: | ||||||||
Amortization of finance lease assets | 539,000 | 499,000 | ||||||
Interest on finance lease liabilities | 68,000 | 97,000 | ||||||
Total lease cost | $ | 4,411,000 | $ | 4,295,000 |
Three Months Ended | ||||||||
June 30, | ||||||||
2023 | 2022 | |||||||
Lease cost | ||||||||
Operating lease cost | $ | 3,742,000 | $ | 3,165,000 | ||||
Short-term lease cost | 293,000 | 454,000 | ||||||
Variable lease cost | 186,000 | 185,000 | ||||||
Finance lease cost: | ||||||||
Amortization of finance lease assets | 403,000 | 539,000 | ||||||
Interest on finance lease liabilities | 62,000 | 68,000 | ||||||
Total lease cost | $ | 4,686,000 | $ | 4,411,000 |
Maturity of lease liabilities | Operating Leases | Finance Leases | Total | |||||||||
2023 - remaining nine months | $ | 8,804,000 | $ | 1,884,000 | $ | 10,688,000 | ||||||
2024 | 10,073,000 | 1,762,000 | 11,835,000 | |||||||||
2025 | 10,143,000 | 1,263,000 | 11,406,000 | |||||||||
2026 | 10,358,000 | 570,000 | 10,928,000 | |||||||||
2027 | 10,496,000 | 106,000 | 10,602,000 | |||||||||
Thereafter | 64,621,000 | 5,000 | 64,626,000 | |||||||||
Total lease payments | 114,495,000 | 5,590,000 | 120,085,000 | |||||||||
Less amount representing interest | (28,290,000 | ) | (370,000 | ) | (28,660,000 | ) | ||||||
Present value of lease liabilities | $ | 86,205,000 | $ | 5,220,000 | $ | 91,425,000 |
Maturity of lease liabilities | Operating Leases | Finance Leases | Total | |||||||||
2024 - remaining nine months | $ | 10,383,000 | $ | 1,521,000 | $ | 11,904,000 | ||||||
2025 | 12,352,000 | 1,576,000 | 13,928,000 | |||||||||
2026 | 12,042,000 | 844,000 | 12,886,000 | |||||||||
2027 | 10,822,000 | 353,000 | 11,175,000 | |||||||||
2028 | 10,725,000 | 194,000 | 10,919,000 | |||||||||
Thereafter | 53,929,000 | 2,000 | 53,931,000 | |||||||||
Total lease payments | 110,253,000 | 4,490,000 | 114,743,000 | |||||||||
Less amount representing interest | (24,326,000 | ) | (355,000 | ) | (24,681,000 | ) | ||||||
Present value of lease liabilities | $ | 85,927,000 | $ | 4,135,000 | $ | 90,062,000 |
June 30, 2022 | March 31, 2022 | |||||||
Lease term and discount rate | ||||||||
Weighted-average remaining lease term (years): | ||||||||
Finance leases | 2.8 | 2.9 | ||||||
Operating leases | 10.2 | 10.4 | ||||||
Weighted-average discount rate: | ||||||||
Finance leases | 5.1 | % | 5.1 | % | ||||
Operating leases | 5.7 | % | 5.7 | % |
June 30, 2023 | March 31, 2023 | |||||||
Lease term and discount rate | ||||||||
Weighted-average remaining lease term (years): | ||||||||
Finance leases | 2.7 | 2.9 | ||||||
Operating leases | 8.9 | 9.0 | ||||||
Weighted-average discount rate: | ||||||||
Finance leases | 5.9 | % | 5.9 | % | ||||
Operating leases | 5.8 | % | 5.8 | % |
Three Months Ended June 30, | ||||||||
2022 | 2021 | |||||||
Receivables discounted | $ | 142,624,000 | $ | 146,669,000 | ||||
Weighted average days | 327 | 329 | ||||||
Annualized weighted average discount rate | 3.7 | % | 1.8 | % | ||||
Amount of discount recognized as interest expense | $ | 4,874,000 | $ | 2,473,000 |
Three Months Ended | ||||||||
June 30, | ||||||||
2023 | 2022 | |||||||
Receivables discounted | $ | 104,332,000 | $ | 142,624,000 | ||||
Weighted average number of days collection was accelerated | 337 | 327 | ||||||
Annualized weighted average discount rate | 6.4 | % | 3.7 | % | ||||
Amount of discount recognized as interest expense | $ | 6,252,000 | $ | 4,874,000 |
Three Months Ended June 30, | ||||||||
2022 | 2021 | |||||||
Net (loss) income | $ | (175,000 | ) | $ | 861,000 | |||
Basic shares | 19,123,354 | 19,054,481 | ||||||
Effect of potentially dilutive securities | 0 | 604,576 | ||||||
Diluted shares | 19,123,354 | 19,659,057 | ||||||
Net (loss) income per share: | ||||||||
Basic net (loss) income per share | $ | (0.01 | ) | $ | 0.05 | |||
Diluted net (loss) income per share | $ | (0.01 | ) | $ | 0.04 |
Three Months Ended | ||||||||
June 30, | ||||||||
2023 | 2022 | |||||||
Net loss | $ | (1,410,000 | ) | $ | (175,000 | ) | ||
Basic shares | 19,508,626 | 19,123,354 | ||||||
Effect of potentially dilutive securities | - | - | ||||||
Diluted shares | 19,508,626 | 19,123,354 | ||||||
Net loss per share: | ||||||||
Basic net loss per share | $ | (0.07 | ) | $ | (0.01 | ) | ||
Diluted net loss per share | $ | (0.07 | ) | $ | (0.01 | ) |
Loss Recognized as Foreign Exchange Impact of Lease Liabilities and Forward Contracts | Gain (Loss) Recognized as Foreign Exchange Impact of Lease Liabilities and Forward Contracts | |||||||||||||||
Three Months Ended | Three Months Ended | |||||||||||||||
Derivatives Not Designated as | June 30, | June 30, | ||||||||||||||
Hedging Instruments | 2022 | 2021 | 2023 | 2022 | ||||||||||||
Forward foreign currency exchange contracts | $ | (698,000 | ) | $ | (262,000 | ) | $ | 500,000 | $ | (698,000 | ) |
June 30, 2023 | March 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
June 30, 2022 | March 31, 2022 | Fair Value Measurements | Fair Value Measurements | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements Using Inputs Considered as | Fair Value Measurements Using Inputs Considered as | Using Inputs Considered as | Using Inputs Considered as | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value | Level 1 | Level 2 | Level 3 | Fair Value | Level 1 | Level 2 | Level 3 | Fair Value | Level 1 | Level 2 | Level 3 | Fair Value | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short-term investments | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mutual funds | $ | 1,995,000 | $ | 1,995,000 | $ | 0 | $ | 0 | $ | 2,202,000 | $ | 2,202,000 | $ | 0 | $ | 0 | $ | 2,159,000 | $ | 2,159,000 | $ | - | $ | - | $ | 2,011,000 | $ | 2,011,000 | $ | - | $ | - | ||||||||||||||||||||||||||||||||
Prepaid expenses and other current assets | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Forward foreign currency exchange contracts | 415,000 | 0 | 415,000 | 0 | 1,113,000 | 0 | 1,113,000 | 0 | 4,389,000 | - | 4,389,000 | - | 3,889,000 | - | 3,889,000 | - | ||||||||||||||||||||||||||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other current liabilities | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred compensation | 1,995,000 | 1,995,000 | 0 | 0 | 2,202,000 | 2,202,000 | 0 | 0 | 2,159,000 | 2,159,000 | - | - | 2,011,000 | 2,011,000 | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||
Convertible notes, related party | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Compound Net Derivative Liability | 8,570,000 | - | - | 8,570,000 | 8,430,000 | - | - | 8,430,000 |
June 30, 2023 | March 31, 2023 | |||||||
Risk free interest rate | 4.09 | % | 3.64 | % | ||||
Cost of equity | 22.30 | % | 21.80 | % | ||||
Weighted average cost of capital | 14.70 | % | 14.60 | % | ||||
Expected volatility of MPA common stock | 50.00 | % | 50.00 | % | ||||
EBITDA volatility | 40.00 | % | 35.00 | % |
Three Months Ended | ||||
June 30, | ||||
2023 | ||||
Beginning balance | $ | 8,430,000 | ||
Changes in fair value of Compound Net Derivative Liability included in earnings | 140,000 | |||
Ending balance | $ | 8,570,000 |
Number of Shares | Weighted Average Exercise Price | Number of | Weighted Average | |||||||||||||
Outstanding at March 31, 2022 | 1,695,499 | $ | 17.53 | |||||||||||||
Shares | Exercise Price | |||||||||||||||
Outstanding at March 31, 2023 | 1,232,745 | $ | 20.20 | |||||||||||||
Granted | 0 | $ | 0 | - | $ | - | ||||||||||
Exercised | (25,543 | ) | $ | 7.46 | - | $ | - | |||||||||
Forfeited/Cancelled | (60,723 | ) | $ | 15.73 | (97,683 | ) | $ | 19.34 | ||||||||
Expired | (3,000 | ) | $ | 9.85 | - | $ | - | |||||||||
Outstanding at June 30, 2022 | 1,606,233 | $ | 17.76 | |||||||||||||
Outstanding at June 30, 2023 | 1,135,062 | $ | 20.28 |
Number of Shares | Weighted Average Grant Date Fair Value | Number of Shares | Weighted Average Grant Date Fair Value | |||||||||||||
Outstanding at March 31, 2022 | 399,063 | $ | 19.98 | |||||||||||||
Outstanding at March 31, 2023 | 429,354 | $ | 15.07 | |||||||||||||
Granted | 276,590 | $ | 13.14 | - | $ | - | ||||||||||
Vested | (149,313 | ) | $ | 20.63 | (147,215 | ) | $ | 15.66 | ||||||||
Forfeited/Cancelled | (41,293 | ) | $ | 20.72 | (76,585 | ) | $ | 13.23 | ||||||||
Outstanding at June 30, 2022 | 485,047 | $ | 15.82 | |||||||||||||
Outstanding at June 30, 2023 | 205,554 | $ | 15.33 |
Three Months Ended | ||||||||||||||||
Three Months Ended June 30, | June 30, | |||||||||||||||
2022 | 2021 | 2023 | 2022 | |||||||||||||
Risk free interest rate | 3.35 | % | 0.47 | % | 4.32 | % | 3.35 | % | ||||||||
Expected life in years | 3 | 3 | 0.8-1.8 | 3 | ||||||||||||
Expected volatility of MPA common stock | 51.30 | % | 53.70 | % | 54.20 | % | 51.30 | % | ||||||||
Expected average volatility of peer companies | 62.70 | % | 59.30 | % | - | % | 62.70 | % | ||||||||
Average correlation coefficient of peer companies | 27.50 | % | 26.70 | % | - | % | 27.50 | % | ||||||||
Expected dividend yield | 0 | 0 | - | - | ||||||||||||
Grant date fair value | $ | 16.02 | $ | 26.89 | $ | 3.57-5.06 | $ | 16.02 |
Number of Shares | Weighted Average Grant Date Fair Value | Number of Shares | Weighted Average Grant Date Fair Value | |||||||||||||
Outstanding at March 31, 2022 | 84,593 | $ | 23.19 | |||||||||||||
Outstanding at March 31, 2023 | 192,696 | $ | 17.48 | |||||||||||||
Granted | 126,028 | $ | 14.00 | 533,856 | $ | 4.20 | ||||||||||
Vested | 0 | $ | 0 | - | $ | - | ||||||||||
Forfeited | 0 | $ | 0 | - | $ | - | ||||||||||
Outstanding at June 30, 2022 | 210,621 | $ | 17.70 | |||||||||||||
Outstanding at June 30, 2023 | 726,552 | $ | 7.73 |
Three Months Ended | ||||||||||||||||
Three Months Ended June 30, | June 30, | |||||||||||||||
2022 | 2021 | 2023 | 2022 | |||||||||||||
Balance at beginning of period | $ | 20,125,000 | $ | 21,093,000 | $ | 19,830,000 | $ | 20,125,000 | ||||||||
Charged to expense | 30,920,000 | 27,261,000 | 31,112,000 | 30,920,000 | ||||||||||||
Amounts processed | (33,177,000 | ) | (28,344,000 | ) | (34,265,000 | ) | (33,177,000 | ) | ||||||||
Balance at end of period | $ | 17,868,000 | $ | 20,010,000 | $ | 16,677,000 | $ | 17,868,000 |
• | Hard Parts, including (i) light duty rotating electric products such as alternators and starters, (ii) wheel hub products, (iii) brake-related products, including brake calipers, brake boosters, brake rotors, brake pads and brake master cylinders, and (iv) turbochargers, |
• | Test Solutions and Diagnostic Equipment, including (i) applications for combustion engine vehicles, including bench top testers for alternators and starters, (ii) equipment for the pre- and post-production of electric vehicles, and (iii) software emulation of power systems applications for the electrification of all forms of transportation (including automobiles, trucks, the emerging electrification of systems within the aerospace industry, and electric vehicle charging stations), and |
• | Heavy Duty, including non-discretionary automotive aftermarket replacement hard parts for heavy-duty truck, industrial, marine, and agricultural applications. |
Three Months Ended June 30, 2023 | ||||||||||||
Hard Parts | All Other | Total | ||||||||||
Net sales to external customers | $ | 149,747,000 | $ | 9,958,000 | $ | 159,705,000 | ||||||
Intersegment sales | 132,000 | 95,000 | 227,000 | |||||||||
Operating income (loss) | 11,506,000 | (1,079,000 | ) | 10,427,000 | ||||||||
Depreciation and amortization | 2,679,000 | 354,000 | 3,033,000 | |||||||||
Segment assets | 1,063,301,000 | 52,368,000 | 1,115,669,000 | |||||||||
Capital expenditures | 40,000 | - | 40,000 |
Three Months Ended June 30, 2022 | ||||||||||||
Hard Parts | All Other | Total | ||||||||||
Net sales to external customers | $ | 152,428,000 | $ | 11,557,000 | $ | 163,985,000 | ||||||
Intersegment sales | 147,000 | 142,000 | 289,000 | |||||||||
Operating income (loss) | 9,611,000 | (2,280,000 | ) | 7,331,000 | ||||||||
Depreciation and amortization | 2,751,000 | 373,000 | 3,124,000 | |||||||||
Segment assets | 1,005,718,000 | 44,530,000 | 1,050,248,000 | |||||||||
Capital expenditures | 1,342,000 | 33,000 | 1,375,000 |
Three Months Ended | ||||||||
June 30, | ||||||||
Net sales | 2023 | 2022 | ||||||
Total net sales for reportable segment | $ | 149,879,000 | $ | 152,575,000 | ||||
Other net sales | 10,053,000 | 11,699,000 | ||||||
Elimination of intersegment net sales | (227,000 | ) | (289,000 | ) | ||||
Total consolidated net sales | $ | 159,705,000 | $ | 163,985,000 |
Three Months Ended | ||||||||
June 30, | ||||||||
Profit or loss | 2023 | 2022 | ||||||
Total operating income for reportable segment | $ | 11,506,000 | $ | 9,611,000 | ||||
Other operating loss | (1,079,000 | ) | (2,280,000 | ) | ||||
Elimination of intersegment operating income | 14,000 | 4,000 | ||||||
Interest expense, net | (11,720,000 | ) | (6,921,000 | ) | ||||
Change in fair value of compound net derivative liability | (140,000 | ) | - | |||||
Total consolidated (loss) income before income tax (benefit) expense | $ | (1,419,000 | ) | $ | 414,000 |
Assets | June 30, 2023 | March 31, 2023 | ||||||
Total assets for reportable segment | $ | 1,063,301,000 | $ | 1,032,739,000 | ||||
Other assets | 52,368,000 | 49,778,000 | ||||||
Elimination of intersegment assets | (57,482,000 | ) | (53,952,000 | ) | ||||
Total consolidated assets | $ | 1,058,187,000 | $ | 1,028,565,000 |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
• | Hard Parts, including (i) light duty rotating electric products such as alternators and starters, (ii) wheel hub products, (iii) brake-related products, including brake calipers, brake boosters, brake rotors, brake pads and brake master cylinders, and (iv) turbochargers, |
• | Test Solutions and Diagnostic Equipment, including (i) applications for combustion engine vehicles, including bench top testers for alternators and starters, (ii) equipment for the pre- and post-production of electric vehicles, and (iii) software emulation of power systems applications for the electrification of all forms of transportation (including automobiles, trucks, the emerging electrification of systems within the aerospace industry, and electric vehicle charging stations), and |
• | Heavy Duty, including non-discretionary automotive aftermarket replacement hard parts for heavy-duty truck, industrial, marine, and agricultural applications. |
Three Months Ended June 30, | ||||||||
2022 | 2021 | |||||||
Cash flow used in operations | $ | (982,000 | ) | $ | (4,739,000 | ) | ||
Finished goods turnover (annualized) (1) | 3.1 | 4.5 |
Three Months Ended June 30, | ||||||||
2023 | 2022 | |||||||
Consolidated cash flow used in operations | $ | (20,470,000 | ) | $ | (982,000 | ) | ||
Consolidated finished goods turnover (annualized) (1) | 3.5 | 3.1 |
(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 June 30, | Three Months Ended June 30, | |||||||||||||||
2022 | 2021 | 2023 | 2022 | |||||||||||||
Net sales | $ | 163,985,000 | $ | 149,034,000 | $ | 159,705,000 | $ | 163,985,000 | ||||||||
Cost of goods sold | 133,683,000 | 125,463,000 | 133,138,000 | 133,683,000 | ||||||||||||
Gross profit | 30,302,000 | 23,571,000 | 26,567,000 | 30,302,000 | ||||||||||||
Gross profit percentage | 18.5 | % | 15.8 | % | 16.6 | % | 18.5 | % |
Three Months Ended June 30, | Three Months Ended June 30, | |||||||||||||||
2022 | 2021 | 2023 | 2022 | |||||||||||||
General and administrative | $ | 13,634,000 | $ | 12,486,000 | $ | 12,602,000 | $ | 13,634,000 | ||||||||
Sales and marketing | 5,542,000 | 5,368,000 | 5,419,000 | 5,542,000 | ||||||||||||
Research and development | 3,113,000 | 2,501,000 | 2,375,000 | 3,113,000 | ||||||||||||
Foreign exchange impact of lease liabilities and forward contracts | 678,000 | (2,533,000 | ) | (4,270,000 | ) | 678,000 | ||||||||||
Percent of net sales | ||||||||||||||||
General and administrative | 8.3 | % | 8.4 | % | 7.9 | % | 8.3 | % | ||||||||
Sales and marketing | 3.4 | % | 3.6 | % | 3.4 | % | 3.4 | % | ||||||||
Research and development | 1.9 | % | 1.7 | % | 1.5 | % | 1.9 | % | ||||||||
Foreign exchange impact of lease liabilities and forward contracts | 0.4 | % | (1.7 | )% | (2.7 | )% | 0.4 | % |
Three Months Ended June 30, | Three Months Ended June 30, | |||||||||||||||
2022 | 2021 | 2023 | 2022 | |||||||||||||
Cash flows (used in) provided by: | ||||||||||||||||
Operating activities | $ | (982,000 | ) | $ | (4,739,000 | ) | $ | (20,470,000 | ) | $ | (982,000 | ) | ||||
Investing activities | (1,461,000 | ) | (2,089,000 | ) | (67,000 | ) | (1,461,000 | ) | ||||||||
Financing activities | (11,266,000 | ) | 16,094,000 | 19,673,000 | (11,266,000 | ) | ||||||||||
Effect of exchange rates on cash and cash equivalents | (90,000 | ) | 94,000 | 155,000 | (90,000 | ) | ||||||||||
Net (decrease) increase in cash and cash equivalents | $ | (13,799,000 | ) | $ | 9,360,000 | |||||||||||
Net decrease in cash and cash equivalents | $ | (709,000 | ) | $ | (13,799,000 | ) | ||||||||||
Additional selected cash flow data: | ||||||||||||||||
Depreciation and amortization | $ | 3,124,000 | $ | 3,145,000 | $ | 3,033,000 | $ | 3,124,000 | ||||||||
Capital expenditures | 1,375,000 | 1,922,000 | 40,000 | 1,375,000 |
Financial covenants required under the Credit Facility | Calculation as of June 30, 2022 | |||||||
Maximum senior leverage ratio | 3.00 | 2.53 | ||||||
Minimum fixed charge coverage ratio | 1.15 | 1.26 |
Three Months Ended June 30, | Three Months Ended June 30, | |||||||||||||||
2022 | 2021 | 2023 | 2022 | |||||||||||||
Receivables discounted | $ | 142,624,000 | $ | 146,669,000 | $ | 104,332,000 | $ | 142,624,000 | ||||||||
Weighted average days | 327 | 329 | ||||||||||||||
Weighted average number of days collection was accelerated | 337 | 327 | ||||||||||||||
Annualized weighted average discount rate | 3.7 | % | 1.8 | % | 6.4 | % | 3.7 | % | ||||||||
Amount of discount recognized as interest expense | $ | 4,874,000 | $ | 2,473,000 | $ | 6,252,000 | $ | 4,874,000 |
Item 1. | Legal Proceedings |
Item 1A. | Risk Factors |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
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) | 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) | ||||||||||||||||||||||||
April 1 - April 30, 2022: | ||||||||||||||||||||||||||||||||
April 1 - April 30, 2023: | ||||||||||||||||||||||||||||||||
Open market and privately negotiated purchases | - | $ | - | - | $ | 18,255,000 | - | $ | - | - | $ | 18,255,000 | ||||||||||||||||||||
May 1 - May 31, 2022: | ||||||||||||||||||||||||||||||||
May 1 - May 31, 2023: | ||||||||||||||||||||||||||||||||
Open market and privately negotiated purchases | - | $ | - | - | 18,255,000 | - | $ | - | - | 18,255,000 | ||||||||||||||||||||||
June 1 - June 30, 2022: | ||||||||||||||||||||||||||||||||
June 1 - June 30, 2023: | ||||||||||||||||||||||||||||||||
Open market and privately negotiated purchases | - | $ | - | - | 18,255,000 | - | $ | - | - | 18,255,000 | ||||||||||||||||||||||
Total | 0 | 0 | $ | 18,255,000 | 0 | 0 | $ | 18,255,000 |
(1) | As of June 30, |
Item 3. | Defaults Upon Senior Securities |
Item 5. | Other Information |
(a) | None. |
(b) | None. |
(c) | During the quarter ended June 30, 2023, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement” as each such term is defined in Item 408 of Regulation S-K. |
Item 6. | Exhibits |
(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. | ||
Amendment to Certificate of Incorporation of the Company | ||||
Amendment to Certificate of Incorporation of the Company | ||||
Amendment to Certificate of Incorporation of the Company | ||||
Amended and Restated By-Laws of Motorcar Parts of America, Inc. | ||||
Certificate of Amendment of the Certificate of Incorporation of the Company | ||||
Amendment to the Amended and Restated By-Laws of Motorcar Parts of America, Inc., as adopted on June 9, 2016 | | |||
Amendment to the Amended and Restated By-Laws of the Company | ||||
Third Amendment to the Amended and Restated By-Laws of Motorcar Parts of America, Inc., as adopted on January 26, 2022 | ||||
Description of the Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 | ||||
2004 Non-Employee Director Stock Option Plan | ||||
2010 Incentive Award Plan | ||||
Amended and Restated 2010 Incentive Award Plan |
Number | Description of Exhibit | Method of Filing | ||
Second Amended and Restated 2010 Incentive Award Plan | ||||
2014 Non-Employee Director Incentive Award Plan | ||||
Third Amended and Restated 2010 Incentive Award Plan | ||||
Fourth Amended and Restated 2010 Incentive Award Plan | ||||
2022 Incentive Award Plan | Incorporated by reference to Appendix A to the Proxy Statement on Schedule 14A filed on July 29, 2022. | |||
Form of Convertible Promissory Note | Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed on March 31, 2023. | |||
Form of Common Stock Warrant | Incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K filed on March 31, 2023. | |||
First Amended and Restated Convertible Promissory Note | Incorporated by reference to Exhibit 4.12 to the Annual Report on Form 10-K filed on June 14, 2023. | |||
First Amended and Restated Common Stock Warrant | Incorporated by reference to Exhibit 4.13 to the Annual Report on Form 10-K filed on June 14, 2023. | |||
Seventh Amendment to Amended and Restated Loan Agreement, dated as of August 3, 2023, among Motorcar Parts of America, Inc., D & V Electronics Ltd., Dixie Electric Ltd., and Dixie Electric Inc., each lender from time to time party thereto, and PNC Bank, National Association, as administrative agent | Filed herewith. | |||
Second Amendment to the Note Purchase Agreement | Filed herewith. | |||
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. |
Number | Description of Exhibit | Method of Filing | ||
101.INS | Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the inline XBRL document). | |||
101.SCM | Inline XBRL Taxonomy Extension Schema Document | |||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||
104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |
MOTORCAR PARTS OF AMERICA, INC. | ||
Dated: August 9, | By: | /s/ David Lee |
David Lee | ||
Chief Financial Officer | ||
Dated: August 9, | By: | /s/ Kamlesh Shah |
Kamlesh Shah | ||
Chief Accounting Officer |