☑ |
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
|
|
|
22
|
|
|
29
|
|
|
29
|
|
PART II — OTHER INFORMATION
|
|
|
|
31
|
|
|
31
|
|
|
31
|
|
|
31
|
|
|
32
|
|
|
34
|
Item 1. |
Financial Statements
|
|
June 30, 2021
|
March 31, 2021
|
||||||
ASSETS
|
(Unaudited)
|
|||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
24,883,000
|
$
|
15,523,000
|
||||
Short-term investments
|
1,823,000
|
1,652,000
|
||||||
Accounts receivable — net
|
54,019,000
|
63,122,000
|
||||||
Inventory
|
320,685,000
|
302,913,000
|
||||||
Contract assets
|
26,264,000
|
26,940,000
|
||||||
Prepaid expenses and other current assets
|
13,307,000
|
12,706,000
|
||||||
Total current assets
|
440,981,000
|
422,856,000
|
||||||
Plant and equipment — net
|
53,287,000
|
53,854,000
|
||||||
Operating lease assets
|
87,924,000
|
71,513,000
|
||||||
Long-term deferred income taxes
|
19,150,000
|
19,381,000
|
||||||
Long-term contract assets
|
293,158,000
|
270,213,000
|
||||||
Goodwill and intangible assets — net
|
8,194,000
|
8,534,000
|
||||||
Other assets
|
1,246,000
|
1,531,000
|
||||||
TOTAL ASSETS
|
$
|
903,940,000
|
$
|
847,882,000
|
||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable and accrued liabilities
|
$
|
141,451,000
|
$
|
152,735,000
|
||||
Customer finished goods returns accrual
|
35,261,000
|
31,524,000
|
||||||
Contract liabilities
|
40,988,000
|
41,072,000
|
||||||
Revolving loan
|
103,000,000
|
84,000,000
|
||||||
Other current liabilities
|
5,774,000
|
6,683,000
|
||||||
Operating lease liabilities
|
5,434,000
|
6,439,000
|
||||||
Current portion of term loan
|
3,670,000
|
3,678,000
|
||||||
Total current liabilities
|
335,578,000
|
326,131,000
|
||||||
Term loan, less current portion
|
15,804,000
|
16,786,000
|
||||||
Long-term contract liabilities
|
153,504,000
|
125,223,000
|
||||||
Long-term deferred income taxes
|
76,000
|
73,000
|
||||||
Long-term operating lease liabilities
|
85,889,000
|
70,551,000
|
||||||
Other liabilities
|
7,862,000
|
7,973,000
|
||||||
Total liabilities
|
598,713,000
|
546,737,000
|
||||||
Commitments and contingencies
|
|
|
||||||
Shareholders' equity:
|
||||||||
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; 19,101,092 and 19,045,386 shares issued and outstanding at June 30, 2021 and March 31, 2021, respectively
|
191,000
|
190,000
|
||||||
Additional paid-in capital
|
224,445,000
|
223,058,000
|
||||||
Retained earnings
|
86,454,000
|
85,593,000
|
||||||
Accumulated other comprehensive loss
|
(5,863,000
|
)
|
(7,696,000
|
)
|
||||
Total shareholders' equity
|
305,227,000
|
301,145,000
|
||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
|
$
|
903,940,000
|
$
|
847,882,000
|
|
Three Months Ended
June 30,
|
|||||||
2021
|
2020
|
|||||||
Net sales
|
$
|
149,034,000
|
$
|
95,356,000
|
||||
Cost of goods sold
|
125,463,000
|
81,969,000
|
||||||
Gross profit
|
23,571,000
|
13,387,000
|
||||||
Operating expenses:
|
||||||||
General and administrative
|
12,486,000
|
11,687,000
|
||||||
Sales and marketing
|
5,368,000
|
4,200,000
|
||||||
Research and development
|
2,501,000
|
1,942,000
|
||||||
Foreign exchange impact of lease liabilities and forward contracts
|
(2,533,000
|
)
|
(4,817,000
|
)
|
||||
Total operating expenses
|
17,822,000
|
13,012,000
|
||||||
Operating income
|
5,749,000
|
375,000
|
||||||
Interest expense, net
|
3,941,000
|
4,409,000
|
||||||
Income (loss) before income tax expense (benefit)
|
1,808,000
|
(4,034,000
|
)
|
|||||
Income tax expense (benefit)
|
947,000
|
(1,022,000
|
)
|
|||||
Net income (loss)
|
$
|
861,000
|
$
|
(3,012,000
|
)
|
|||
Basic net income (loss) per share
|
$
|
0.05
|
$
|
(0.16
|
)
|
|||
Diluted net income (loss) per share
|
$
|
0.04
|
$
|
(0.16
|
)
|
|||
Weighted average number of shares outstanding:
|
||||||||
Basic
|
19,054,481
|
18,976,178
|
||||||
Diluted
|
19,659,057
|
18,976,178
|
|
Three Months Ended
June 30,
|
|||||||
2021
|
2020
|
|||||||
Net income (loss)
|
$
|
861,000
|
$
|
(3,012,000
|
)
|
|||
Other comprehensive income (loss), net of tax:
|
||||||||
Foreign currency translation gain (loss)
|
1,833,000
|
(1,263,000
|
)
|
|||||
Total other comprehensive income (loss), net of tax
|
1,833,000
|
(1,263,000
|
)
|
|||||
Comprehensive income (loss)
|
$
|
2,694,000
|
$
|
(4,275,000
|
)
|
|
Common Stock
|
|||||||||||||||||||||||
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
|
||||||||||||
Compensation recognized under employee stock plans
|
-
|
-
|
1,576,000
|
-
|
-
|
1,576,000
|
||||||||||||||||||
Exercise of stock options, net of shares withheld for employee taxes
|
19,837
|
-
|
354,000
|
-
|
-
|
354,000
|
||||||||||||||||||
Issuance of common stock upon vesting of RSUs, net of shares withheld for employee taxes
|
35,869
|
1,000
|
(543,000
|
)
|
-
|
-
|
(542,000
|
)
|
||||||||||||||||
Foreign currency translation
|
-
|
-
|
-
|
-
|
1,833,000
|
1,833,000
|
||||||||||||||||||
Net income
|
-
|
-
|
-
|
861,000
|
-
|
861,000
|
||||||||||||||||||
Balance at June 30, 2021
|
19,101,092
|
$
|
191,000
|
$
|
224,445,000
|
$
|
86,454,000
|
$
|
(5,863,000
|
)
|
$
|
305,227,000
|
|
Common Stock
|
|||||||||||||||||||||||
Shares
|
Amount
|
Additional
Paid-in
Capital
|
Retained
Earnings
|
Accumulated
Other
Comprehensive
Income Loss
|
Total
|
|||||||||||||||||||
Balance at March 31,2020
|
18,969,380
|
$
|
190,000
|
$
|
218,581,000
|
$
|
64,117,000
|
$
|
(7,368,000
|
)
|
$
|
275,520,000
|
||||||||||||
Compensation recognized under employee stock plans
|
-
|
-
|
1,043,000
|
-
|
-
|
1,043,000
|
||||||||||||||||||
Exercise of stock options
|
3,000
|
-
|
20,000
|
-
|
-
|
20,000
|
||||||||||||||||||
Issuance of common stock upon vesting of RSUs, net of shares withheld for employee taxes
|
29,953
|
-
|
(207,000
|
)
|
-
|
-
|
(207,000
|
)
|
||||||||||||||||
Foreign currency translation
|
-
|
-
|
-
|
-
|
(1,263,000
|
)
|
(1,263,000
|
)
|
||||||||||||||||
Net loss
|
-
|
-
|
-
|
(3,012,000
|
)
|
-
|
(3,012,000
|
)
|
||||||||||||||||
Balance at June 30, 2020
|
19,002,333
|
$
|
190,000
|
$
|
219,437,000
|
$
|
61,105,000
|
$
|
(8,631,000
|
)
|
$
|
272,101,000
|
|
Three Months Ended
June 30,
|
|||||||
2021
|
2020
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income (loss)
|
$
|
861,000
|
$
|
(3,012,000
|
)
|
|||
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
|
||||||||
Depreciation and amortization
|
3,145,000
|
2,551,000
|
||||||
Amortization of interest
|
414,000
|
312,000
|
||||||
Amortization of core premiums paid to customers
|
2,531,000
|
1,223,000
|
||||||
Amortization of finished goods premiums paid to customers
|
146,000
|
-
|
||||||
Noncash lease expense
|
1,791,000
|
1,686,000
|
||||||
Gain due to the change in the fair value of the contingent consideration
|
(60,000
|
)
|
(47,000
|
)
|
||||
Foreign exchange impact of lease liabilities and forward contracts
|
(2,533,000
|
)
|
(4,817,000
|
)
|
||||
Gain on short-term investments
|
(5,000
|
)
|
(155,000
|
)
|
||||
Net provision for inventory reserves
|
3,141,000
|
2,074,000
|
||||||
Net provision for customer payment discrepancies and credit losses
|
229,000
|
30,000
|
||||||
Deferred income taxes
|
358,000
|
465,000
|
||||||
Share-based compensation expense
|
1,576,000
|
1,043,000
|
||||||
Loss on disposal of plant and equipment
|
33,000
|
-
|
||||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
9,020,000
|
25,847,000
|
||||||
Inventory
|
(20,625,000
|
)
|
(8,034,000
|
)
|
||||
Prepaid expenses and other current assets
|
281,000
|
(2,898,000
|
)
|
|||||
Other assets
|
297,000
|
219,000
|
||||||
Accounts payable and accrued liabilities
|
(10,183,000
|
)
|
6,478,000
|
|||||
Customer finished goods returns accrual
|
3,698,000
|
1,621,000
|
||||||
Contract assets, net
|
(24,857,000
|
)
|
(6,076,000
|
)
|
||||
Contract liabilities, net
|
27,880,000
|
4,620,000
|
||||||
Operating lease liabilities
|
(1,259,000
|
)
|
(1,416,000
|
)
|
||||
Other liabilities
|
(618,000
|
)
|
674,000
|
|||||
Net cash (used in) provided by operating activities
|
(4,739,000
|
)
|
22,388,000
|
|||||
Cash flows from investing activities:
|
||||||||
Purchase of plant and equipment
|
(1,922,000
|
)
|
(2,983,000
|
)
|
||||
Change in short-term investments
|
(167,000
|
)
|
(55,000
|
)
|
||||
Net cash used in investing activities
|
(2,089,000
|
)
|
(3,038,000
|
)
|
||||
Cash flows from financing activities:
|
||||||||
Borrowings under revolving loan
|
32,000,000
|
-
|
||||||
Repayments of revolving loan
|
(13,000,000
|
)
|
(40,000,000
|
)
|
||||
Repayments of term loan
|
(938,000
|
)
|
(938,000
|
)
|
||||
Payments for debt issuance costs
|
(1,102,000
|
)
|
-
|
|||||
Payments on finance lease obligations
|
(678,000
|
)
|
(549,000
|
)
|
||||
Exercise of stock options
|
354,000
|
20,000
|
||||||
Cash used to net share settle equity awards
|
(542,000
|
)
|
(207,000
|
)
|
||||
Net cash provided by (used in) financing activities
|
16,094,000
|
(41,674,000
|
)
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
94,000
|
172,000
|
||||||
Net increase (decrease) in cash and cash equivalents
|
9,360,000
|
(22,152,000
|
)
|
|||||
Cash and cash equivalents — Beginning of period
|
15,523,000
|
49,616,000
|
||||||
Cash and cash equivalents — End of period
|
$
|
24,883,000
|
$
|
27,464,000
|
||||
Supplemental disclosures of cash flow information:
|
||||||||
Cash paid for interest, net
|
$
|
3,521,000
|
$
|
4,234,000
|
||||
Cash paid for income taxes, net of refunds
|
1,550,000
|
447,000
|
||||||
Cash paid for operating leases
|
2,472,000
|
2,574,000
|
||||||
Cash paid for finance leases
|
775,000
|
632,000
|
||||||
Plant and equipment acquired under finance leases
|
230,000
|
1,427,000
|
||||||
Assets acquired under operating leases
|
15,718,000
|
15,564,000
|
||||||
Non-cash capital expenditures
|
206,000
|
678,000
|
|
June 30, 2021
|
March 31, 2021
|
||||||
Accounts receivable — trade
|
$
|
67,212,000
|
$
|
81,549,000
|
||||
Allowance for credit losses
|
(273,000
|
)
|
(348,000
|
)
|
||||
Customer payment discrepancies
|
(797,000
|
)
|
(752,000
|
)
|
||||
Customer returns RGA issued
|
(12,123,000
|
)
|
(17,327,000
|
)
|
||||
Total accounts receivable — net
|
$
|
54,019,000
|
$
|
63,122,000
|
|
Three Months Ended
June 30,
|
|||||||
|
2021
|
2020
|
||||||
Balance at beginning of period
|
$
|
348,000
|
$
|
4,252,000
|
||||
Provision for expected credit losses
|
(36,000
|
)
|
170,000
|
|||||
Recoveries
|
-
|
(100,000
|
)
|
|||||
Amounts written off charged against the allowance
|
(39,000
|
)
|
(3,897,000
|
)
|
||||
Balance at end of period
|
$
|
273,000
|
$
|
425,000
|
|
June 30, 2021
|
March 31, 2021
|
||||||
Inventory
|
||||||||
Raw materials
|
$
|
140,109,000
|
$
|
128,190,000
|
||||
Work-in-process
|
7,189,000
|
5,233,000
|
||||||
Finished goods
|
173,725,000
|
168,184,000
|
||||||
|
321,023,000
|
301,607,000
|
||||||
Less allowance for excess and obsolete inventory
|
(13,945,000
|
)
|
(13,246,000
|
)
|
||||
Inventory — net
|
307,078,000
|
288,361,000
|
||||||
Inventory unreturned
|
13,607,000
|
14,552,000
|
||||||
Total inventory
|
$
|
320,685,000
|
$
|
302,913,000
|
|
June 30, 2021
|
March 31, 2021
|
||||||
Short-term contract assets
|
||||||||
Cores expected to be returned by customers
|
$
|
15,024,000
|
$
|
17,657,000
|
||||
Upfront payments to customers
|
533,000
|
684,000
|
||||||
Finished goods premiums paid to customers
|
644,000
|
405,000
|
||||||
Core premiums paid to customers
|
10,063,000
|
8,194,000
|
||||||
Total short-term contract assets
|
$
|
26,264,000
|
$
|
26,940,000
|
||||
|
||||||||
Remanufactured cores held at customers' locations
|
$
|
243,389,000
|
$
|
229,918,000
|
||||
Upfront payments to customers
|
398,000
|
486,000
|
||||||
Finished goods premiums paid to customers
|
3,191,000
|
2,731,000
|
||||||
Core premiums paid to customers
|
40,611,000
|
31,509,000
|
||||||
Long-term core inventory deposits
|
5,569,000
|
5,569,000
|
||||||
Total long-term contract assets
|
$
|
293,158,000
|
$
|
270,213,000
|
|
Three Months Ended
June 30,
|
|||||||
|
2021
|
2020
|
||||||
Net sales
|
||||||||
Customer A
|
34
|
%
|
45
|
%
|
||||
Customer B
|
20
|
%
|
26
|
%
|
||||
Customer C
|
31
|
%
|
17
|
%
|
|
June 30, 2021
|
March 31,2021
|
||||||
Accounts receivable - trade
|
||||||||
Customer A
|
43
|
%
|
50
|
%
|
||||
Customer B
|
24
|
%
|
23
|
%
|
||||
Customer C
|
1
|
%
|
-
|
|
Three Months Ended
June 30,
|
|||||||
|
2021
|
2020
|
||||||
Product line
|
||||||||
Rotating electrical products
|
67
|
%
|
72
|
%
|
||||
Wheel hub products
|
14
|
%
|
18
|
%
|
||||
Brake related products
|
16
|
%
|
9
|
%
|
||||
Other products
|
3
|
%
|
1
|
%
|
||||
|
100
|
%
|
100
|
%
|
|
June 30, 2021
|
March 31, 2021
|
||||||
Principal amount of Term Loans
|
$
|
19,687,000
|
$
|
20,625,000
|
||||
Unamortized financing fees
|
(213,000
|
)
|
(161,000
|
)
|
||||
Net carrying amount of Term Loans
|
19,474,000
|
20,464,000
|
||||||
Less current portion of Term Loans
|
(3,670,000
|
)
|
(3,678,000
|
)
|
||||
Long-term portion of Term Loans
|
$
|
15,804,000
|
$
|
16,786,000
|
Year Ending March 31,
|
||||
2022 - remaining nine months
|
$
|
2,812,000
|
||
2023
|
3,750,000
|
|||
2024
|
3,750,000
|
|||
2025
|
3,750,000
|
|||
2026
|
3,750,000
|
|||
Thereafter
|
1,875,000
|
|||
Total payments
|
$
|
19,687,000
|
|
June 30, 2021
|
March 31, 2021
|
||||||
Short-term contract liabilities
|
||||||||
Customer core returns accruals
|
$
|
12,350,000
|
$
|
12,710,000
|
||||
Customer allowances earned
|
17,298,000
|
16,513,000
|
||||||
Customer deposits
|
2,735,000
|
2,234,000
|
||||||
Finished goods liabilities
|
2,424,000
|
1,883,000
|
||||||
Core bank liability
|
1,597,000
|
1,585,000
|
||||||
Accrued core payment, net
|
4,584,000
|
6,147,000
|
||||||
Total short-term contract liabilities
|
$
|
40,988,000
|
$
|
41,072,000
|
||||
|
||||||||
Long-term contract liabilities
|
||||||||
Customer core returns accruals
|
$
|
132,469,000
|
$
|
103,719,000
|
||||
Customer allowances earned
|
245,000
|
313,000
|
||||||
Finished goods liabilities
|
2,668,000
|
2,678,000
|
||||||
Core bank liability
|
16,499,000
|
16,903,000
|
||||||
Accrued core payment, net
|
1,623,000
|
1,610,000
|
||||||
Total long-term contract liabilities
|
$
|
153,504,000
|
$
|
125,223,000
|
Leases
|
Classification
|
June 30, 2021
|
March 31, 2021
|
||||||
Assets:
|
|
||||||||
Operating
|
Operating lease assets
|
$
|
87,924,000
|
$
|
71,513,000
|
||||
Finance
|
Plant and equipment
|
8,592,000
|
8,852,000
|
||||||
Total leased assets
|
|
$
|
96,516,000
|
$
|
80,365,000
|
||||
|
|
||||||||
Liabilities:
|
|
||||||||
Current
|
|
||||||||
Operating
|
Operating lease liabilities
|
$
|
5,434,000
|
$
|
6,439,000
|
||||
Finance
|
Other current liabilities
|
2,584,000
|
2,640,000
|
||||||
Long-term
|
|
||||||||
Operating
|
Long-term operating lease liabilities
|
85,889,000
|
70,551,000
|
||||||
Finance
|
Other liabilities
|
4,606,000
|
4,995,000
|
||||||
Total lease liabilities
|
|
$
|
98,513,000
|
$
|
84,625,000
|
Three Months Ended
|
||||||||
|
June 30,
|
|||||||
|
2021
|
2020
|
||||||
Lease cost
|
||||||||
Operating lease cost
|
$
|
3,042,000
|
$
|
2,683,000
|
||||
Short-term lease cost
|
376,000
|
317,000
|
||||||
Variable lease cost
|
281,000
|
143,000
|
||||||
Finance lease cost:
|
||||||||
Amortization of finance lease assets
|
499,000
|
413,000
|
||||||
Interest on finance lease liabilities
|
97,000
|
83,000
|
||||||
Total lease cost
|
$
|
4,295,000
|
$
|
3,639,000
|
Maturity of lease liabilities
|
Operating Leases
|
Finance Leases
|
Total
|
|||||||||
2022 - remaining nine months
|
$
|
7,807,000
|
$
|
2,246,000
|
$
|
10,053,000
|
||||||
2023
|
11,351,000
|
2,404,000
|
13,755,000
|
|||||||||
2024
|
9,968,000
|
1,610,000
|
11,578,000
|
|||||||||
2025
|
10,041,000
|
1,118,000
|
11,159,000
|
|||||||||
2026
|
10,320,000
|
432,000
|
10,752,000
|
|||||||||
Thereafter
|
75,101,000
|
-
|
75,101,000
|
|||||||||
Total lease payments
|
124,588,000
|
7,810,000
|
132,398,000
|
|||||||||
Less amount representing interest
|
(33,265,000
|
)
|
(620,000
|
)
|
(33,885,000
|
)
|
||||||
Present value of lease liabilities
|
$
|
91,323,000
|
$
|
7,190,000
|
$
|
98,513,000
|
|
June 30, 2021
|
March 31, 2021
|
||||||
Lease term and discount rate
|
||||||||
Weighted-average remaining lease term (years):
|
||||||||
Finance leases
|
3.2
|
3.4
|
||||||
Operating leases
|
11.0
|
11.1
|
||||||
Weighted-average discount rate:
|
||||||||
Finance leases
|
5.3
|
%
|
5.3
|
%
|
||||
Operating leases
|
5.7
|
%
|
5.9
|
%
|
|
Three Months Ended
June 30,
|
|||||||
|
2021
|
2020
|
||||||
Receivables discounted
|
$
|
146,669,000
|
$
|
111,360,000
|
||||
Weighted average days
|
329
|
345
|
||||||
Annualized weighted average discount rate
|
1.8
|
%
|
2.5
|
%
|
||||
Amount of discount recognized as interest expense
|
$
|
2,473,000
|
$
|
2,686,000
|
|
Three Months Ended
June 30,
|
|||||||
|
2021
|
2020
|
||||||
Net income (loss)
|
$
|
861,000
|
$
|
(3,012,000
|
)
|
|||
Basic shares
|
19,054,481
|
18,976,178
|
||||||
Effect of potentially dilutive securities
|
604,576
|
-
|
||||||
Diluted shares
|
19,659,057
|
18,976,178
|
||||||
Net income (loss) per share:
|
||||||||
Basic net income (loss) per share
|
$
|
0.05
|
$
|
(0.16
|
)
|
|||
Diluted net income (loss) per share
|
$
|
0.04
|
$
|
(0.16
|
)
|
Gain (Loss) Recognized as Foreign Exchange Impact of Lease Liabilities and Forward Contracts
|
||||||||
Derivatives Not Designated as
|
Three Months Ended
June 30,
|
|||||||
Hedging Instruments
|
2021
|
2020
|
||||||
Forward foreign currency exchange contracts
|
$
|
(262,000
|
)
|
$
|
2,832,000
|
|
June 30, 2021
|
March 31, 2021
|
||||||||||||||||||||||||||||||
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
|
$
|
1,823,000
|
$
|
1,823,000
|
$
|
-
|
$
|
-
|
$
|
1,652,000
|
$
|
1,652,000
|
$
|
-
|
$
|
-
|
||||||||||||||||
Prepaid expenses and other current assets
|
||||||||||||||||||||||||||||||||
Forward foreign currency exchange contracts
|
1,167,000
|
-
|
1,167,000
|
-
|
1,429,000
|
-
|
1,429,000
|
-
|
||||||||||||||||||||||||
Liabilities
|
||||||||||||||||||||||||||||||||
Accrued liabilities
|
||||||||||||||||||||||||||||||||
Short-term contingent consideration
|
850,000
|
-
|
-
|
850,000
|
910,000
|
-
|
-
|
910,000
|
||||||||||||||||||||||||
Other current liabilities
|
||||||||||||||||||||||||||||||||
Deferred compensation
|
1,823,000
|
1,823,000
|
-
|
-
|
1,652,000
|
1,652,000
|
-
|
-
|
|
June 30, 2021
|
|||
Risk free interest rate
|
0.06
|
%
|
||
Counter party rate
|
3.00
|
%
|
||
Expected volatility
|
30-40
|
%
|
||
Weighted average cost of capital
|
13-15.5
|
%
|
Three Months Ended
June 30,
|
||||||||
Contingent Consideration
|
2021
|
2020
|
||||||
Beginning balance
|
$
|
910,000
|
$
|
2,653,000
|
||||
Changes in revaluations of contingent consideration included in earnings
|
(60,000
|
)
|
(47,000
|
)
|
||||
Ending balance
|
$
|
850,000
|
$
|
2,606,000
|
|
Number of
Shares
|
Weighted Average
Exercise Price
|
||||||
Outstanding at March 31, 2021
|
1,744,885
|
$
|
17.51
|
|||||
Granted
|
-
|
$
|
-
|
|||||
Exercised
|
(21,270
|
)
|
$
|
18.24
|
||||
Forfeited
|
(900
|
)
|
$
|
17.90
|
||||
Outstanding at June 30, 2021
|
1,722,715
|
$
|
17.50
|
|
Number of
Shares
|
Weighted Average
Grant Date Fair
Value
|
||||||
Outstanding at March 31, 2021
|
354,484
|
$
|
17.22
|
|||||
Granted
|
218,673
|
$
|
22.27
|
|||||
Vested
|
(59,483
|
)
|
$
|
16.62
|
||||
Forfeited
|
-
|
$
|
-
|
|||||
Outstanding at June 30, 2021
|
513,674
|
$
|
19.44
|
|
Three Months Ended
June 30,
|
|||
|
2021
|
|||
Risk free interest rate
|
0.47
|
%
|
||
Expected life in years
|
3
|
|||
Expected volatility of MPA common stock
|
53.70
|
%
|
||
Expected average volatility of peer companies
|
59.30
|
%
|
||
Average correlation coefficient of peer companies
|
26.70
|
%
|
||
Expected dividend yield
|
-
|
|||
Grant date fair value
|
$
|
26.89
|
|
Number of
Shares
|
Weighted Average
Grant Date Fair
Value
|
||||||
Outstanding at March 31, 2021
|
-
|
$
|
-
|
|||||
Granted
|
84,593
|
$
|
23.19
|
|||||
Vested
|
-
|
$
|
-
|
|||||
Forfeited
|
-
|
$
|
-
|
|||||
Outstanding at June 30, 2021
|
84,593
|
$
|
23.19
|
|
Three Months Ended
June 30,
|
|||||||
|
2021
|
2020
|
||||||
Balance at beginning of period
|
$
|
21,093,000
|
$
|
18,300,000
|
||||
Charged to expense
|
27,261,000
|
23,089,000
|
||||||
Amounts processed
|
(28,344,000
|
)
|
(19,197,000
|
)
|
||||
Balance at end of period
|
$
|
20,010,000
|
$
|
22,192,000
|
|
Three Months Ended
June 30, |
|||||||
2021
|
2020
|
|||||||
Cash flow (used in) provided by operations
|
$
|
(4,739,000
|
)
|
$
|
22,388,000
|
|||
Finished goods turnover (annualized) (1)
|
4.5
|
3.4
|
(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. Annualized finished goods turnover for the three months ended June 30, 2020 has been updated to conform to the current year presentation for non-core finished goods turnover. We believe this provides a useful measure of our ability to turn our inventory into revenues.
|
|
Three Months Ended
June 30,
|
|||||||
2021
|
2020
|
|||||||
Net sales
|
$
|
149,034,000
|
$
|
95,356,000
|
||||
Cost of goods sold
|
125,463,000
|
81,969,000
|
||||||
Gross profit
|
23,571,000
|
13,387,000
|
||||||
Gross profit percentage
|
15.8
|
%
|
14.0
|
%
|
|
Three Months Ended
June 30,
|
|||||||
2021
|
2020
|
|||||||
General and administrative
|
$
|
12,486,000
|
$
|
11,687,000
|
||||
Sales and marketing
|
5,368,000
|
4,200,000
|
||||||
Research and development
|
2,501,000
|
1,942,000
|
||||||
Foreign exchange impact of lease liabilities and forward contracts
|
(2,533,000
|
)
|
(4,817,000
|
)
|
||||
Percent of net sales
|
||||||||
General and administrative
|
8.4
|
%
|
12.3
|
%
|
||||
Sales and marketing
|
3.6
|
%
|
4.4
|
%
|
||||
Research and development
|
1.7
|
%
|
2.0
|
%
|
||||
Foreign exchange impact of lease liabilities and forward contracts
|
(1.7
|
)%
|
(5.1
|
)%
|
|
Three Months Ended
June 30,
|
|||||||
2021
|
2020
|
|||||||
Cash flows provided by (used in):
|
||||||||
Operating activities
|
$
|
(4,739,000
|
)
|
$
|
22,388,000
|
|||
Investing activities
|
(2,089,000
|
)
|
(3,038,000
|
)
|
||||
Financing activities
|
16,094,000
|
(41,674,000
|
)
|
|||||
Effect of exchange rates on cash and cash equivalents
|
94,000
|
172,000
|
||||||
Net increase (decrease) in cash and cash equivalents
|
$
|
9,360,000
|
$
|
(22,152,000
|
)
|
|||
Additional selected cash flow data:
|
||||||||
Depreciation and amortization
|
$
|
3,145,000
|
$
|
2,551,000
|
||||
Capital expenditures
|
1,922,000
|
2,983,000
|
|
Financial covenants
required under the
Credit Facility
|
Calculation as of
June 30, 2021
|
||
Maximum senior leverage ratio
|
3.00
|
1.57
|
||
Minimum fixed charge coverage ratio
|
1.10
|
1.34
|
|
Three Months Ended
June 30,
|
|||||||
2021
|
2020
|
|||||||
Receivables discounted
|
$
|
146,669,000
|
$
|
111,360,000
|
||||
Weighted average days
|
329
|
345
|
||||||
Annualized weighted average discount rate
|
1.8
|
%
|
2.5
|
%
|
||||
Amount of discount recognized as interest expense
|
$
|
2,473,000
|
$
|
2,686,000
|
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4. |
Controls and Procedures
|
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)
|
||||||||||||
April 1 - April 30, 2021:
|
||||||||||||||||
Open market and privately negotiated purchases
|
-
|
$
|
-
|
-
|
$
|
20,169,000
|
||||||||||
May 1 - May 31, 2021:
|
||||||||||||||||
Open market and privately negotiated purchases
|
-
|
$
|
-
|
-
|
20,169,000
|
|||||||||||
June 1 - June 30, 2021:
|
||||||||||||||||
Open market and privately negotiated purchases
|
-
|
$
|
-
|
-
|
20,169,000
|
|||||||||||
Total
|
0
|
0
|
$
|
20,169,000
|
(1) |
As of June 30, 2021, $16,831,000 was utilized and $20,169,000 remains available to repurchase shares under the authorized share repurchase program, subject to the limit in our Credit Facility. We retired the 730,521 shares repurchased under this program through June 30, 2021. Our share repurchase program does not obligate us to acquire any specific number of shares and shares may be repurchased in privately negotiated and/or open market transactions.
|
Item 5. |
Other Information
|
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.
|
|
|
|
|
|
3.3
|
|
Amendment to Certificate of Incorporation of the Company
|
|
|
|
|
|
|
|
3.4
|
|
Amendment to Certificate of Incorporation of the Company
|
|
|
|
|
|
|
|
3.5
|
|
Amendment to Certificate of Incorporation of the Company
|
|
|
|
|
|
|
|
3.6
|
|
Amended and Restated By-Laws of Motorcar Parts of America, Inc.
|
|
|
|
|
|
|
|
3.7
|
|
Certificate of Amendment of the Certificate of Incorporation of the Company
|
|
|
|
|
|
|
|
3.8
|
|
Amendment to the Amended and Restated By-Laws of Motorcar Parts of America, Inc., as adopted on June 9, 2016
|
|
|
|
|
|
|
|
3.9
|
|
Amendment to the Amended and Restated By-Laws of the Company
|
|
|
|
|
|
|
|
4.1
|
|
2004 Non-Employee Director Stock Option Plan
|
|
|
|
|
|
|
|
4.2
|
|
2010 Incentive Award Plan
|
|
|
|
|
|
|
|
4.3
|
|
Amended and Restated 2010 Incentive Award Plan
|
|
Number
|
|
Description of Exhibit
|
|
Method of Filing
|
|
|
|
|
|
4.4
|
|
Second Amended and Restated 2010 Incentive Award Plan
|
|
|
|
|
|
|
|
4.5
|
|
2014 Non-Employee Director Incentive Award Plan
|
|
|
|
|
|
|
|
4.6
|
|
Third Amended and Restated 2010 Incentive Award Plan
|
|
|
|
|
|
|
|
4.7
|
|
Fourth Amended and Restated 2010 Incentive Award Plan
|
|
|
|
|
|
|
|
|
Amendment No. 5 to Employment Agreement, dated as of June 18, 2021, between Motorcar Parts of America, Inc., and Selwyn Joffe
|
|
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.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, 2021
|
By:
|
/s/ David Lee
|
|
|
David Lee
|
|
|
Chief Financial Officer
|
|
|
|
Dated: August 9, 2021
|
By:
|
/s/ Kamlesh Shah
|
|
|
Kamlesh Shah
|
|
|
Chief Accounting Officer
|
(a)
|
Base Salary; Benefits. The COMPANY shall pay EXECUTIVE a base salary (“SALARY”) of Eight Hundred Twenty Eight Thousand Two Hundred and Fifty Six Dollars ($828,256) per year. EXECUTIVE’S salary will
be reviewed from time to time in accordance with the COMPANY’S established procedures for adjusting salaries for similarly situated employees. The EXECUTIVE shall also receive such additional benefits as are usually provided from time to
time to senior executives of the COMPANY.
|
|
(b) |
Annual Incentive Plan. EXECUTIVE shall participate in the COMPANY’S Annual Incentive Plan as adopted and amended from time to time by the BOARD OF DIRECTORS (the “ANNUAL INCENTIVE PLAN”), with a target bonus, to be set each year,
currently equal to One Hundred Twenty Percent (120%) of EXECUTIVE’S SALARY (each such bonus that is actually earned a “BONUS”).
|
|
THE COMPANY:
|
||
|
MOTORCAR PARTS OF AMERICA, INC.
|
||
By:
|
|||
Name: Rudolph J. Borneo
|
|||
Title: Chair, Compensation Committee
|
|||
|
EXECUTIVE:
|
||
Selwyn Joffe
|
Date: August 9, 2021
|
/s/ Selwyn Joffe
|
Selwyn Joffe
|
|
Chief Executive Officer
|
Date: August 9, 2021
|
/s/ David Lee
|
David Lee
|
|
Chief Financial Officer
|
Date: August 9, 2021
|
/s/ Kamlesh Shah
|
Kamlesh Shah
|
|
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, 2021
|
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, 2021
|
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/ Kamlesh Shah
|
|
Kamlesh Shah
|
|
Chief Accounting Officer
|
|
August 9, 2021
|