United States securities and exchange commission logo
March 29, 2023
David Lee
Chief Financial Officer
Motorcar Parts of America, Inc.
2929 California Street
Torrance, CA 90503
Re: Motorcar Parts of
America, Inc.
Form 10-K for the
Fiscal Year Ended March 31, 2022
Filed June 14, 2022
File No. 001-33861
Dear David Lee:
We have limited our review of your filing to the financial
statements and related
disclosures and have the following comments. In some of our comments, we
may ask you to
provide us with information so we may better understand your disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to these comments, we may have additional comments.
Form 8-K furnished February 9, 2023
Exhibit 99.1
1. We note you provide a
range of forward-looking EBITDA and adjusted EBITDA for
fiscal 2023 without
providing reconciliations to the most directly comparable GAAP
measure or a statement
that providing such reconciliations requires unreasonable efforts.
In future filings,
please provide reconciliations to the most directly comparable GAAP
measure. If all of the
information necessary for the reconciliations is not available without
unreasonable efforts,
identify and disclose the information that is unavailable and its
probable significance.
Also present the most directly comparable GAAP measure with
equal or greater
prominence. Refer to Item 10(e)(1)(i) of Regulation S-K and Questions
102.10(a), 102.10(b),
and 103.02 of the Staff s Compliance and Disclosure Interpretations
on Non-GAAP Financial
Measures.
Form 10-K for the Fiscal Year Ended March 31, 2022
David Lee
FirstName LastNameDavid Lee
Motorcar Parts of America, Inc.
Comapany
March NameMotorcar Parts of America, Inc.
29, 2023
March2 29, 2023 Page 2
Page
FirstName LastName
Note 2. Summary of Significant Accounting Policies
Segment Reporting, page F-7
2. We have reviewed your response to comment 1 and note that your Hard
Parts operating
segment consists of rotating electrical products, wheel hub products,
brake-related
products, and turbochargers. We further note that you quantify net
sales for the first three
product categories on page F-27 and that each category significantly
contributed to your
net sales. In addition, we note from recent earnings call transcripts
that management
appears to monitor gross margins of these product lines and that the
product categories
have different gross margin profiles. As an example, during the second
quarter earnings
call held November 9, 2022, management indicated that brake-related
gross margins
currently "are lower than some of the legacy products." Please tell us
how you
determined that none of the Hard Parts product lines represent
operating segments. In
doing so, ensure that you provide us with the following information:
Tell us the title and describe the role of each individual who
reports to your Chief
Operating Decision Maker ("CODM").
Tell us how often the CODM meets with his direct reports, the
financial information
the CODM reviews to prepare for those meetings, the financial
information discussed
in those meetings, and who else attends those meetings.
Tell us who, if anyone, is held accountable for the product
lines within Hard Parts
and the titles and roles of the persons these individuals report
to in the organization.
Describe the information regularly provided to the CODM and how
frequently it is
prepared.
Describe the information regularly provided to the Board of
Directors and how
frequently it is prepared.
Explain how budgets are prepared, who approves the budget at
each step of the
process, the level of detail discussed at each step, and the
level at which the CODM
makes changes to the budget.
Describe the level of detail communicated to the CODM when
actual results differ
from budgets and who is involved in meetings with the CODM to
discuss budget-to-
actual variances.
Describe the basis for determining the compensation for each of
the individuals that
report to the CODM.
Considering the significance of the rotating electrical, wheel
hub, and brake-related
sales in relation to your Test Solutions and Diagnostic Equipment
and Heavy Duty
David Lee
Motorcar Parts of America, Inc.
March 29, 2023
Page 3
operating segments, explain why, if true, the CODM regularly
reviews the less
significant operating segments but not the more significant Hard
Parts product lines.
In closing, we remind you that the company and its management are
responsible for the
accuracy and adequacy of their disclosures, notwithstanding any review,
comments, action or
absence of action by the staff.
You may contact Stephany Yang at (202) 551-3167 or Andrew Blume at (202)
551-
3254 with any questions.
FirstName LastNameDavid Lee Sincerely,
Comapany NameMotorcar Parts of America, Inc.
Division of
Corporation Finance
March 29, 2023 Page 3 Office of
Manufacturing
FirstName LastName