☑ | 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)
|
Large accelerated filer
☐
|
Accelerated filer
☑
|
Non-accelerated filer
☐
|
Smaller reporting company
☐
|
(Do not check if a smaller reporting company)
|
PART I — FINANCIAL INFORMATION
|
|
4
|
|
4
|
|
5
|
|
6
|
|
7
|
|
8
|
|
21
|
|
29
|
|
29
|
|
PART II — OTHER INFORMATION
|
|
30
|
|
30
|
|
30
|
|
30
|
|
30
|
|
31
|
June 30, 2016
|
March 31, 2016
|
|||||||
ASSETS
|
(Unaudited)
|
|||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
19,717,000
|
$
|
21,897,000
|
||||
Short-term investments
|
1,982,000
|
1,813,000
|
||||||
Accounts receivable — net
|
11,148,000
|
8,548,000
|
||||||
Inventory— net
|
73,341,000
|
58,060,000
|
||||||
Inventory unreturned
|
10,399,000
|
10,520,000
|
||||||
Deferred income taxes
|
34,281,000
|
33,347,000
|
||||||
Prepaid expenses and other current assets
|
8,188,000
|
5,900,000
|
||||||
Total current assets
|
159,056,000
|
140,085,000
|
||||||
Plant and equipment — net
|
16,805,000
|
16,099,000
|
||||||
Long-term core inventory — net
|
243,822,000
|
241,100,000
|
||||||
Long-term core inventory deposits
|
5,569,000
|
5,569,000
|
||||||
Long-term deferred income taxes
|
463,000
|
236,000
|
||||||
Goodwill
|
2,053,000
|
2,053,000
|
||||||
Intangible assets — net
|
4,428,000
|
4,573,000
|
||||||
Other assets
|
8,587,000
|
3,657,000
|
||||||
TOTAL ASSETS
|
$
|
440,783,000
|
$
|
413,372,000
|
||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
81,982,000
|
$
|
72,152,000
|
||||
Accrued liabilities
|
7,206,000
|
9,101,000
|
||||||
Customer finished goods returns accrual
|
23,546,000
|
26,376,000
|
||||||
Accrued core payment
|
9,906,000
|
8,989,000
|
||||||
Revolving loan
|
21,000,000
|
7,000,000
|
||||||
Other current liabilities
|
9,175,000
|
4,698,000
|
||||||
Current portion of term loan
|
3,064,000
|
3,067,000
|
||||||
Total current liabilities
|
155,879,000
|
131,383,000
|
||||||
Term loan, less current portion
|
19,203,000
|
19,980,000
|
||||||
Long-term accrued core payment
|
18,462,000
|
17,550,000
|
||||||
Long-term deferred income taxes
|
13,682,000
|
14,315,000
|
||||||
Other liabilities
|
13,496,000
|
19,336,000
|
||||||
Total liabilities
|
220,722,000
|
202,564,000
|
||||||
Commitments and contingencies
|
||||||||
Shareholders' equity:
|
||||||||
Preferred stock; par value $.01 per share, 5,000,000 shares authorized; none issued
|
-
|
-
|
||||||
Series A junior participating preferred stock; par value $.01 per share, 20,000 shares authorized; none issued
|
-
|
-
|
||||||
Common stock; par value $.01 per share, 50,000,000 shares authorized; 18,630,444 and 18,531,751 shares issued and outstanding at June 30, 2016 and March 31, 2016, respectively
|
186,000
|
185,000
|
||||||
Additional paid-in capital
|
205,015,000
|
203,650,000
|
||||||
Retained earnings
|
20,225,000
|
11,825,000
|
||||||
Accumulated other comprehensive loss
|
(5,365,000
|
)
|
(4,852,000
|
)
|
||||
Total shareholders' equity
|
220,061,000
|
210,808,000
|
||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
|
$
|
440,783,000
|
$
|
413,372,000
|
Three Months Ended
June 30,
|
||||||||
2016
|
2015
|
|||||||
Net sales
|
$
|
85,412,000
|
$
|
85,835,000
|
||||
Cost of goods sold
|
65,021,000
|
59,844,000
|
||||||
Gross profit
|
20,391,000
|
25,991,000
|
||||||
Operating expenses:
|
||||||||
General and administrative
|
3,625,000
|
11,360,000
|
||||||
Sales and marketing
|
2,634,000
|
2,280,000
|
||||||
Research and development
|
869,000
|
736,000
|
||||||
Total operating expenses
|
7,128,000
|
14,376,000
|
||||||
Operating income
|
13,263,000
|
11,615,000
|
||||||
Interest expense, net
|
2,819,000
|
8,437,000
|
||||||
Income before income tax expense
|
10,444,000
|
3,178,000
|
||||||
Income tax expense
|
2,936,000
|
1,268,000
|
||||||
Net income
|
$
|
7,508,000
|
$
|
1,910,000
|
||||
Basic net income per share
|
$
|
0.40
|
$
|
0.11
|
||||
Diluted net income per share
|
$
|
0.39
|
$
|
0.10
|
||||
Weighted average number of shares outstanding:
|
||||||||
Basic
|
18,545,621
|
18,002,877
|
||||||
Diluted
|
19,484,938
|
18,888,013
|
Three Months Ended
June 30,
|
||||||||
2016
|
2015
|
|||||||
Net income
|
$
|
7,508,000
|
$
|
1,910,000
|
||||
Other comprehensive (loss) income, net of tax:
|
||||||||
Unrealized gain (loss) on short-term investments (net of tax of $15,000 and $(4,000))
|
22,000
|
(6,000
|
)
|
|||||
Foreign currency translation loss
|
(535,000
|
)
|
(349,000
|
)
|
||||
Total other comprehensive loss, net of tax
|
(513,000
|
)
|
(355,000
|
)
|
||||
Comprehensive income
|
$
|
6,995,000
|
$
|
1,555,000
|
Three Months Ended
June 30,
|
||||||||
Cash flows from operating activities:
|
2016
|
2015
|
||||||
Net income
|
$
|
7,508,000
|
$
|
1,910,000
|
||||
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
|
||||||||
Depreciation
|
715,000
|
517,000
|
||||||
Amortization of intangible assets
|
145,000
|
174,000
|
||||||
Amortization of debt issuance costs
|
171,000
|
334,000
|
||||||
Write-off of debt issuance costs
|
-
|
5,108,000
|
||||||
Amortization of interest on accrued core payments
|
191,000
|
190,000
|
||||||
(Gain) loss due to change in fair value of the warrant liability
|
(5,589,000
|
)
|
1,142,000
|
|||||
(Gain) loss due to change in fair value of the contingent consideration
|
(16,000
|
)
|
-
|
|||||
Net provision for inventory reserves
|
394,000
|
891,000
|
||||||
Net provision for (recovery of) customer payment discrepancies
|
189,000
|
(141,000
|
)
|
|||||
Net provision for (recovery of) doubtful accounts
|
7,000
|
(85,000
|
)
|
|||||
Deferred income taxes
|
(953,000
|
)
|
(1,866,000
|
)
|
||||
Share-based compensation expense
|
729,000
|
516,000
|
||||||
Changes in current assets and liabilities:
|
||||||||
Accounts receivable
|
(2,796,000
|
)
|
6,897,000
|
|||||
Inventory
|
(15,422,000
|
)
|
3,310,000
|
|||||
Inventory unreturned
|
121,000
|
(609,000
|
)
|
|||||
Prepaid expenses and other current assets
|
(2,163,000
|
)
|
960,000
|
|||||
Other assets
|
(4,941,000
|
)
|
(113,000
|
)
|
||||
Accounts payable and accrued liabilities
|
7,630,000
|
1,387,000
|
||||||
Customer finished goods returns accrual
|
(2,830,000
|
)
|
(152,000
|
)
|
||||
Long-term core inventory
|
(2,975,000
|
)
|
(11,062,000
|
)
|
||||
Long-term core inventory deposits
|
-
|
(996,000
|
)
|
|||||
Accrued core payments
|
1,638,000
|
(5,071,000
|
)
|
|||||
Other liabilities
|
4,408,000
|
93,000
|
||||||
Net cash (used in) provided by operating activities
|
(13,839,000
|
)
|
3,334,000
|
|||||
Cash flows from investing activities:
|
||||||||
Purchase of plant and equipment
|
(1,568,000
|
)
|
(619,000
|
)
|
||||
Purchase of business
|
-
|
(3,200,000
|
)
|
|||||
Change in short-term investments
|
(133,000
|
)
|
(188,000
|
)
|
||||
Net cash used in investing activities
|
(1,701,000
|
)
|
(4,007,000
|
)
|
||||
Cash flows from financing activities:
|
||||||||
Borrowings under revolving loan
|
15,000,000
|
15,000,000
|
||||||
Repayments of revolving loan
|
(1,000,000
|
)
|
-
|
|||||
Borrowings under term loan
|
-
|
25,000,000
|
||||||
Repayments of term loan
|
(782,000
|
)
|
(84,500,000
|
)
|
||||
Payments for debt issuance costs
|
(382,000
|
)
|
(2,212,000
|
)
|
||||
Payments on capital lease obligations
|
(83,000
|
)
|
(67,000
|
)
|
||||
Exercise of stock options
|
987,000
|
1,786,000
|
||||||
Excess tax benefits from stock-based compensation
|
-
|
1,786,000
|
||||||
Cash used to net share settle equity awards
|
(350,000
|
)
|
-
|
|||||
Net cash provided by (used in) financing activities
|
13,390,000
|
(43,207,000
|
)
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
(30,000
|
)
|
(1,000
|
)
|
||||
Net decrease in cash and cash equivalents
|
(2,180,000
|
)
|
(43,881,000
|
)
|
||||
Cash and cash equivalents — Beginning of period
|
21,897,000
|
61,230,000
|
||||||
Cash and cash equivalents — End of period
|
$
|
19,717,000
|
$
|
17,349,000
|
||||
Supplemental disclosures of cash flow information:
|
||||||||
Cash paid during the period for:
|
||||||||
Interest, net
|
$
|
2,423,000
|
$
|
3,172,000
|
||||
Income taxes, net of refunds
|
70,000
|
86,000
|
||||||
Non-cash investing and financing activities:
|
||||||||
Plant and equipment acquired under capital lease
|
$
|
40,000
|
$
|
1,569,000
|
||||
Contingent consideration
|
-
|
1,320,000
|
June 30, 2016
|
March 31, 2016
|
|||||||||||||||||
Weighted
Average
Amortization
Period
|
Gross Carrying
Value
|
Accumulated
Amortization
|
Gross Carrying
Value
|
Accumulated
Amortization
|
||||||||||||||
Intangible assets subject to amortization
|
||||||||||||||||||
Trademarks
|
11 years
|
$
|
705,000
|
$
|
143,000
|
$
|
705,000
|
$
|
127,000
|
|||||||||
Customer relationships
|
13 years
|
5,900,000
|
2,034,000
|
5,900,000
|
1,905,000
|
|||||||||||||
Total
|
$
|
6,605,000
|
$
|
2,177,000
|
$
|
6,605,000
|
$
|
2,032,000
|
Three Months Ended
June 30,
|
||||||||
2016
|
2015
|
|||||||
Amortization expense
|
$
|
145,000
|
$
|
174,000
|
Year Ending March 31,
|
||||
2017 - remaining nine months
|
$
|
435,000
|
||
2018
|
580,000
|
|||
2019
|
580,000
|
|||
2020
|
580,000
|
|||
2021
|
580,000
|
|||
Thereafter
|
1,673,000
|
|||
Total
|
$
|
4,428,000
|
June 30, 2016
|
March 31, 2016
|
|||||||
Accounts receivable — trade
|
$
|
54,436,000
|
$
|
62,206,000
|
||||
Allowance for bad debts
|
(4,291,000
|
)
|
(4,284,000
|
)
|
||||
Customer allowances earned
|
(8,974,000
|
)
|
(12,029,000
|
)
|
||||
Customer payment discrepancies
|
(761,000
|
)
|
(703,000
|
)
|
||||
Customer returns RGA issued
|
(9,671,000
|
)
|
(6,561,000
|
)
|
||||
Customer core returns accruals
|
(19,591,000
|
)
|
(30,081,000
|
)
|
||||
Less: total accounts receivable offset accounts
|
(43,288,000
|
)
|
(53,658,000
|
)
|
||||
Total accounts receivable — net
|
$
|
11,148,000
|
$
|
8,548,000
|
Three Months Ended
June 30,
|
||||||||
2016
|
2015
|
|||||||
Balance at beginning of period
|
$
|
10,845,000
|
$
|
10,904,000
|
||||
Charged to expense/additions
|
22,694,000
|
17,371,000
|
||||||
Amounts processed
|
(21,980,000
|
)
|
(18,490,000
|
)
|
||||
Balance at end of period
|
$
|
11,559,000
|
$
|
9,785,000
|
June 30, 2016
|
March 31, 2016
|
|||||||
Non-core inventory
|
||||||||
Raw materials
|
$
|
21,192,000
|
$
|
17,394,000
|
||||
Work-in-process
|
595,000
|
135,000
|
||||||
Finished goods
|
54,140,000
|
42,982,000
|
||||||
75,927,000
|
60,511,000
|
|||||||
Less allowance for excess and obsolete inventory
|
(2,586,000
|
)
|
(2,451,000
|
)
|
||||
Total
|
$
|
73,341,000
|
$
|
58,060,000
|
||||
Inventory unreturned
|
$
|
10,399,000
|
$
|
10,520,000
|
||||
Long-term core inventory
|
||||||||
Used cores held at the Company's facilities
|
$
|
32,000,000
|
$
|
34,405,000
|
||||
Used cores expected to be returned by customers
|
11,435,000
|
10,781,000
|
||||||
Remanufactured cores held in finished goods
|
31,295,000
|
24,489,000
|
||||||
Remanufactured cores held at customers' locations
|
170,287,000
|
172,600,000
|
||||||
245,017,000
|
242,275,000
|
|||||||
Less allowance for excess and obsolete inventory
|
(1,195,000
|
)
|
(1,175,000
|
)
|
||||
Total
|
$
|
243,822,000
|
$
|
241,100,000
|
||||
Long-term core inventory deposits
|
$
|
5,569,000
|
$
|
5,569,000
|
Three Months Ended
June 30,
|
||||||||
Sales
|
2016
|
2015
|
||||||
Customer A
|
52
|
%
|
50
|
%
|
||||
Customer B
|
14
|
%
|
20
|
%
|
||||
Customer C
|
21
|
%
|
17
|
%
|
Accounts receivable - trade
|
June 30, 2016
|
March 31, 2016
|
||||||
Customer A
|
39
|
%
|
37
|
%
|
||||
Customer B
|
15
|
%
|
17
|
%
|
||||
Customer C
|
14
|
%
|
15
|
%
|
Three Months Ended
June 30,
|
||||||||
2016
|
2015
|
|||||||
Rotating electrical products
|
72
|
%
|
77
|
%
|
||||
Wheel hub products
|
22
|
%
|
18
|
%
|
||||
Brake master cylinders products
|
6
|
%
|
5
|
%
|
||||
100
|
%
|
100
|
%
|
June 30, 2016
|
March 31, 2016
|
|||||||
Principal amount of term loan
|
$
|
22,656,000
|
$
|
23,438,000
|
||||
Unamortized financing fees
|
(389,000
|
)
|
(391,000
|
)
|
||||
Net carrying amount of term loan
|
22,267,000
|
23,047,000
|
||||||
Less current portion of term loan
|
(3,064,000
|
)
|
(3,067,000
|
)
|
||||
Long-term portion of term loan
|
$
|
19,203,000
|
$
|
19,980,000
|
Year Ending March 31,
|
||||
2017 - remaining nine months
|
2,343,000
|
|||
2018
|
3,125,000
|
|||
2019
|
3,125,000
|
|||
2020
|
3,125,000
|
|||
2021
|
10,938,000
|
|||
Total payments
|
$
|
22,656,000
|
Three Months Ended
June 30,
|
||||||||
2016
|
2015
|
|||||||
Receivables discounted
|
$
|
80,649,000
|
$
|
79,247,000
|
||||
Weighted average days
|
341
|
342
|
||||||
Annualized weighted average discount rate
|
2.7
|
%
|
2.1
|
%
|
||||
Amount of discount as interest expense
|
$
|
2,068,000
|
$
|
1,579,000
|
Three Months Ended
June 30,
|
||||||||
2016
|
2015
|
|||||||
Net income
|
$
|
7,508,000
|
$
|
1,910,000
|
||||
Basic shares
|
18,545,621
|
18,002,877
|
||||||
Effect of potentially dilutive securities
|
939,317
|
885,136
|
||||||
Diluted shares
|
19,484,938
|
18,888,013
|
||||||
Net income per share:
|
||||||||
Basic net income per share
|
$
|
0.40
|
$
|
0.11
|
||||
Diluted net income per share
|
$
|
0.39
|
$
|
0.10
|
June 30, 2016 | March 31, 2016 | |||||||||||||||||||||||||||||
Fair Value Measurements
Using Inputs Considered as
|
Fair Value Measurements
Using Inputs Considered as
|
|||||||||||||||||||||||||||||
Fair Value
|
Level 1 |
Level 2
|
Level 3
|
Fair Value
|
Level 1 |
Level 2
|
Level 3
|
|||||||||||||||||||||||
Assets
|
||||||||||||||||||||||||||||||
Short-term investments
|
||||||||||||||||||||||||||||||
Mutual funds
|
$
|
1,982,000
|
$
|
1,982,000
|
-
|
-
|
$
|
1,813,000
|
$
|
1,813,000
|
-
|
-
|
||||||||||||||||||
Liabilities
|
||||||||||||||||||||||||||||||
Accrued liabilities
|
||||||||||||||||||||||||||||||
Contingent consideration
|
314,000
|
-
|
-
|
$
|
314,000
|
224,000
|
-
|
-
|
$
|
224,000
|
||||||||||||||||||||
Other current liabilities
|
||||||||||||||||||||||||||||||
Deferred compensation
|
1,982,000
|
1,982,000
|
-
|
-
|
1,813,000
|
1,813,000
|
-
|
-
|
||||||||||||||||||||||
Forward foreign currency exchange contracts
|
1,095,000
|
-
|
$
|
1,095,000
|
-
|
416,000
|
-
|
$
|
416,000
|
-
|
||||||||||||||||||||
Other liabilities
|
||||||||||||||||||||||||||||||
Warrant liability
|
10,054,000
|
-
|
-
|
10,054,000
|
15,643,000
|
-
|
-
|
15,643,000
|
||||||||||||||||||||||
Contingent consideration
|
-
|
-
|
-
|
-
|
106,000
|
-
|
-
|
106,000
|
Supplier Warrant
|
||||
Risk free interest rate
|
0.50
|
%
|
||
Expected life in years
|
1.25
|
|||
Expected volatility
|
36.10
|
%
|
||
Dividend yield
|
-
|
|||
Probability of future financing
|
0
|
%
|
Three Months Ended June 30,
|
||||||||||||||||
2016
|
2015
|
|||||||||||||||
Supplier
Warrant
|
Contingent
Consideration
|
Supplier
Warrant
|
Contingent
Consideration
|
|||||||||||||
Beginning balance
|
$
|
15,643,000
|
$
|
330,000
|
$
|
10,506,000
|
$
|
-
|
||||||||
Newly issued
|
-
|
-
|
-
|
1,320,000
|
||||||||||||
Total (gain) loss included in net income
|
(5,589,000
|
)
|
(16,000
|
)
|
1,142,000
|
-
|
||||||||||
Exercises/settlements
|
-
|
-
|
-
|
-
|
||||||||||||
Net transfers in (out) of Level 3
|
-
|
-
|
-
|
-
|
||||||||||||
Ending balance
|
$
|
10,054,000
|
$
|
314,000
|
$
|
11,648,000
|
$
|
1,320,000
|
Three Months Ended
June 30,
|
||||||||
2016
|
2015
|
|||||||
Weighted average risk free interest rate
|
1.39
|
%
|
1.82
|
%
|
||||
Weighted average expected holding period (years)
|
5.85
|
5.00
|
||||||
Weighted average expected volatility
|
47.41
|
%
|
49.02
|
%
|
||||
Weighted average expected dividend yield
|
-
|
-
|
||||||
Weighted average fair value of options granted
|
$
|
13.08
|
$
|
13.77
|
Number of
Shares
|
Weighted Average
Exercise Price
|
|||||||
Outstanding at March 31, 2016
|
984,066
|
$
|
11.98
|
|||||
Granted
|
182,800
|
$
|
28.68
|
|||||
Exercised
|
(80,133
|
)
|
$
|
12.32
|
||||
Cancelled
|
-
|
$
|
-
|
|||||
Outstanding at June 30, 2016
|
1,086,733
|
$
|
14.77
|
Number of
Shares
|
Weighted Average
Grant Date Fair
Value
|
|||||||
Non-vested at March 31, 2016
|
153,527
|
$
|
22.28
|
|||||
Granted
|
42,876
|
$
|
28.54
|
|||||
Vested
|
(29,558
|
)
|
$
|
24.21
|
||||
Cancelled
|
-
|
$
|
-
|
|||||
Non-vested at June 30, 2016
|
166,845
|
$
|
23.55
|
Three Months Ended June 30, 2016
|
Three Months Ended June 30, 2015
|
|||||||||||||||||||||||
Unrealized
Gain
on Short-Term
Investments
|
Foreign
Currency
Translation
|
Total
|
Unrealized
Gain (Loss)
on Short-Term
Investments
|
Foreign
Currency
Translation
|
Total
|
|||||||||||||||||||
Balance at beginning of period
|
$
|
332,000
|
$
|
(5,184,000
|
)
|
$
|
(4,852,000
|
)
|
$
|
345,000
|
$
|
(2,863,000
|
)
|
$
|
(2,518,000
|
)
|
||||||||
Other comprehensive income (loss), net of tax
|
22,000
|
(535,000
|
)
|
(513,000
|
)
|
(6,000
|
)
|
(349,000
|
)
|
(355,000
|
)
|
|||||||||||||
Amounts reclassified from accumulated other comprehensive loss, net of tax
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Balance at end of period
|
$
|
354,000
|
$
|
(5,719,000
|
)
|
$
|
(5,365,000
|
)
|
$
|
339,000
|
$
|
(3,212,000
|
)
|
$
|
(2,873,000
|
)
|
Three Months Ended
June 30,
|
||||||||
2016
|
2015
|
|||||||
Gross profit percentage
|
23.9
|
%
|
30.3
|
%
|
||||
Cash flow (used in) provided by operations
|
$
|
(13,839,000
|
)
|
$
|
3,334,000
|
|||
Finished goods turnover (annualized) (1)
|
5.4
|
5.9
|
(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,
|
||||||||
2016
|
2015
|
|||||||
Net sales
|
$
|
85,412,000
|
$
|
85,835,000
|
||||
Cost of goods sold
|
65,021,000
|
59,844,000
|
||||||
Gross profit
|
20,391,000
|
25,991,000
|
||||||
Gross profit percentage
|
23.9
|
%
|
30.3
|
%
|
Three Months Ended
June 30,
|
||||||||
2016
|
2015
|
|||||||
General and administrative
|
$
|
3,625,000
|
$
|
11,360,000
|
||||
Sales and marketing
|
2,634,000
|
2,280,000
|
||||||
Research and development
|
869,000
|
736,000
|
||||||
Percent of net sales
|
||||||||
General and administrative
|
4.2
|
%
|
13.2
|
%
|
||||
Sales and marketing
|
3.1
|
%
|
2.7
|
%
|
||||
Research and development
|
1.0
|
%
|
0.9
|
%
|
Three Months Ended
June 30,
|
||||||||
2016
|
2015
|
|||||||
Cash provided by (used in):
|
||||||||
Operating activities
|
$
|
(13,839,000
|
)
|
$
|
3,334,000
|
|||
Investing activities
|
(1,701,000
|
)
|
(4,007,000
|
)
|
||||
Financing activities
|
13,390,000
|
(43,207,000
|
)
|
|||||
Effect of exchange rates on cash and cash equivalents
|
(30,000
|
)
|
(1,000
|
)
|
||||
Net decrease in cash and cash equivalents
|
$
|
(2,180,000
|
)
|
$
|
(43,881,000
|
)
|
||
Additional selected cash flow data:
|
||||||||
Depreciation and amortization
|
$
|
860,000
|
$
|
691,000
|
||||
Capital expenditures
|
1,568,000
|
619,000
|
Calculation as of
June 30, 2016 |
Financial covenants
required per the Credit
Facility
|
|||||||
Maximum senior leverage ratio
|
0.52
|
2.50
|
||||||
Minimum fixed charge coverage ratio
|
1.31
|
1.05
|
Three Months Ended
June 30,
|
||||||||
2016
|
2015
|
|||||||
Receivables discounted
|
$
|
80,649,000
|
$
|
79,247,000
|
||||
Weighted average days
|
341
|
342
|
||||||
Annualized weighted average discount rate
|
2.7
|
%
|
2.1
|
%
|
||||
Amount of discount as interest expense
|
$
|
2,068,000
|
$
|
1,579,000
|
1. | Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; |
2. | Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and |
3. | Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. |
(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.
|
||
3.3
|
Amendment to Certificate of Incorporation of the Company
|
Incorporated by reference to Exhibit 3.3 to the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 1997.
|
||
3.4
|
Amendment to Certificate of Incorporation of the Company
|
Incorporated by reference to Exhibit 3.4 to the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 1998 (the “1998 Form 10-K”).
|
||
3.5
|
Amendment to Certificate of Incorporation of the Company
|
Incorporated by reference to Exhibit C to the Company’s proxy statement on Schedule 14A filed with the SEC on November 25, 2003.
|
||
3.6
|
Amended and Restated By-Laws of Motorcar Parts of America, Inc.
|
Incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed on August 24, 2010.
|
||
3.7
|
Certificate of Amendment of the Certificate of Incorporation of the Company
|
Incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed on April 9, 2014.
|
||
3.8
|
Amendment to the Amended and Restated By-Laws of Motorcar Parts of America, Inc., as adopted on June 9, 2016
|
Incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed on June 14, 2016.
|
||
4.1
|
2003 Long Term Incentive Plan
|
Incorporated by reference to Exhibit 4.9 to the Company’s Registration Statement on Form S-8 filed with the SEC on April 2, 2004.
|
||
4.2
|
2004 Non-Employee Director Stock Option Plan
|
Incorporated by reference to Appendix A to the Proxy Statement on Schedule 14A for the 2004 Annual Shareholders Meeting.
|
||
4.3
|
2010 Incentive Award Plan
|
Incorporated by reference to Appendix A to the Proxy Statement on Schedule 14A filed on December 15, 2010.
|
||
4.4
|
Amended and Restated 2010 Incentive Award Plan
|
Incorporated by reference to Appendix A to the Proxy Statement on Schedule 14A filed on March 5, 2013.
|
||
4.5
|
Second Amended and Restated 2010 Incentive Award Plan
|
Incorporated by reference to Appendix A to the Proxy Statement on Schedule 14A filed on March 3, 2014.
|
Number
|
Description of Exhibit
|
Method of Filing
|
||
4.6
|
2014 Non-Employee Director Incentive Award Plan
|
Incorporated by reference to Appendix B to the Proxy Statement on Schedule 14A filed on March 3, 2014.
|
||
Consent and Second Amendment to Loan Agreement, dated as of May 19, 2016, among Motorcar Parts of America, Inc., each lender from time to time party thereto and PNC Bank, National Association, as administrative agent
|
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.
|
|||
101.1
|
The following financial information from Motorcar Parts of America, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016, formatted in Extensible Business Reporting Language (“XBRL”) and filed electronically herewith: (i) the Consolidated Balance Sheets; (ii) the Consolidated Statements of Income; (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Cash Flows; and (v) the Condensed Notes to Consolidated Financial Statements
|
Filed herewith.
|
MOTORCAR PARTS OF AMERICA, INC
|
||
Dated: August 9, 2016
|
By:
|
/s/ David Lee
|
David Lee
|
||
Chief Financial Officer
|
||
Dated: August 9, 2016
|
By:
|
/s/ Kevin Daly
|
Kevin Daly
|
||
Chief Accounting Officer
|
Period
|
Capital Expenditure
|
Fiscal Year ended March 31, 2016
|
$7,000,000
|
Fiscal Year ended March 31, 2017
|
$5,000,000
|
Fiscal Year ended March 31, 2018 and each fiscal year thereafter
|
$4,000,000
|
BORROWER:
|
||
|
||
MOTORCAR PARTS OF AMERICA, INC. | ||
By:
|
/s/ Selwyn Joffe
|
|
Name: Selwyn Joffe
|
||
Title: Chairman, President and Chief Executive Officer
|
AGENT AND LENDER: | ||
PNC BANK, NATIONAL ASSOCIATION | ||
By:
|
/s/ Frederick Kiehne
|
|
Name: Frederick Kiehne
|
||
Title: Senior Vice President
|
||
Revised Revolving Commitment Amount: $70,000,000 Revised Revolving Commitment Percentage: 58.333333333% |
LENDERS: | ||
EVERBANK | ||
By: |
/s/ Christopher J. Norrito
|
|
Name: Christopher J. Norrito
|
||
Title: Vice President
|
||
Revised Revolving Commitment Amount: $21,000,000 Revised Revolving Commitment Percentage: 17.50% |
ISRAEL DISCOUNT BANK OF NEW YORK | ||
By: | /s/ Robert Abraham | |
Name: Robert Abraham | ||
Title: First Vice President | ||
By: | /s/ Richard Miller | |
Name: Richard Miller | ||
Title: Senior Vice President | ||
Revised Revolving Commitment Amount: $17,000,000 Revised Revolving Commitment Percentage: 14.16666670% |
SCOTTRADE BANK | ||
By: | /s/ Ann M. Sutter | |
Name: Ann M. Sutter | ||
Title: Senior Vice President | ||
Revised Revolving Commitment Amount: $12,000,000 Revised Revolving Commitment Percentage: 10.0% |
Date: August 9, 2016
|
/s/ Selwyn Joffe
|
Selwyn Joffe
|
|
Chief Executive Officer
|
Date: August 9, 2016
|
/s/ David Lee
|
David Lee
|
|
Chief Financial Officer
|
Date: August 9, 2016
|
/s/ Kevin Daly
|
Kevin Daly
|
|
Chief Accounting Officer
|
1. | The Quarterly Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities and Exchange Act of 1934; and |
2. | The information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Selwyn Joffe
|
|
Selwyn Joffe
|
|
Chief Executive Officer
|
|
August 9, 2016
|
1. | The Quarterly Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities and Exchange Act of 1934; and |
2. | The information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ David Lee
|
|
David Lee
|
|
Chief Financial Officer
|
|
August 9, 2016
|
1. | The Quarterly Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities and Exchange Act of 1934; and |
2. | The information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Kevin Daly
|
|
Kevin Daly
|
|
Chief Accounting Officer
|
|
August 9, 2016
|