☑ | 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 | ||
35 | ||
September 30, 2018 | March 31, 2018 | September 30, 2019 | March 31, 2019 | |||||||||||||
ASSETS | (Unaudited) | (As Adjusted) | (Unaudited) | |||||||||||||
Current assets: | (Note 4) | |||||||||||||||
Cash and cash equivalents | $ | 6,175,000 | $ | 13,049,000 | $ | 6,455,000 | $ | 9,911,000 | ||||||||
Short-term investments | 3,230,000 | 2,828,000 | 2,192,000 | 3,273,000 | ||||||||||||
Accounts receivable — net | 56,085,000 | 63,174,000 | 69,914,000 | 56,015,000 | ||||||||||||
Inventory— net | 188,287,000 | 161,210,000 | ||||||||||||||
Inventory — net | 250,667,000 | 233,726,000 | ||||||||||||||
Inventory unreturned | 9,100,000 | 7,508,000 | 8,684,000 | 8,469,000 | ||||||||||||
Contract assets (see Note 8) | 24,272,000 | 23,206,000 | ||||||||||||||
Contract assets (see Note 5) | 19,471,000 | 22,183,000 | ||||||||||||||
Income tax receivable | 11,572,000 | 7,972,000 | 10,205,000 | 10,009,000 | ||||||||||||
Prepaid expenses and other current assets | 10,200,000 | 8,608,000 | 8,846,000 | 9,296,000 | ||||||||||||
Total current assets | 308,921,000 | 287,555,000 | 376,434,000 | 352,882,000 | ||||||||||||
Plant and equipment — net | 30,512,000 | 28,322,000 | 40,723,000 | 35,151,000 | ||||||||||||
Operating lease assets (see Note 9) | 49,262,000 | - | ||||||||||||||
Long-term deferred income taxes | 7,345,000 | 6,698,000 | 10,237,000 | 9,746,000 | ||||||||||||
Long-term contract assets (see Note 8) | 230,438,000 | 222,731,000 | ||||||||||||||
Long-term contract assets (see Note 5) | 224,329,000 | 221,876,000 | ||||||||||||||
Goodwill | 2,551,000 | 2,551,000 | 3,205,000 | 3,205,000 | ||||||||||||
Intangible assets — net | 3,380,000 | 3,766,000 | 7,493,000 | 8,431,000 | ||||||||||||
Other assets | 866,000 | 804,000 | 875,000 | 1,071,000 | ||||||||||||
TOTAL ASSETS | $ | 584,013,000 | $ | 552,427,000 | $ | 712,558,000 | $ | 632,362,000 | ||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||
Current liabilities: | ||||||||||||||||
Accounts payable | $ | 92,663,000 | $ | 73,273,000 | $ | 85,307,000 | $ | 92,461,000 | ||||||||
Accrued liabilities | 10,622,000 | 12,048,000 | 14,318,000 | 14,604,000 | ||||||||||||
Customer finished goods returns accrual | 19,961,000 | 17,805,000 | 23,621,000 | 22,615,000 | ||||||||||||
Contract liabilities (see Note 11) | 31,488,000 | 32,603,000 | ||||||||||||||
Contract liabilities (see Note 8) | 24,064,000 | 30,599,000 | ||||||||||||||
Revolving loan | 52,906,000 | 54,000,000 | 144,000,000 | 110,400,000 | ||||||||||||
Other current liabilities | 4,970,000 | 4,471,000 | 4,852,000 | 4,990,000 | ||||||||||||
Operating lease liabilities (see Note 9) | 4,487,000 | - | ||||||||||||||
Current portion of term loan | 3,685,000 | 3,068,000 | 3,678,000 | 3,685,000 | ||||||||||||
Total current liabilities | 216,295,000 | 197,268,000 | 304,327,000 | 279,354,000 | ||||||||||||
Term loan, less current portion | 26,032,000 | 13,913,000 | 22,299,000 | 24,187,000 | ||||||||||||
Long-term contract liabilities (see Note 11) | 52,535,000 | 48,183,000 | ||||||||||||||
Long-term contract liabilities (see Note 8) | 49,327,000 | 40,889,000 | ||||||||||||||
Long-term deferred income taxes | 211,000 | 226,000 | 130,000 | 257,000 | ||||||||||||
Long-term operating lease liabilities (see Note 9) | 47,925,000 | - | ||||||||||||||
Other liabilities | 6,776,000 | 5,957,000 | 7,205,000 | 7,920,000 | ||||||||||||
Total liabilities | 301,849,000 | 265,547,000 | 431,213,000 | 352,607,000 | ||||||||||||
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; 18,799,477 and 18,893,102 shares issued and outstanding at September 30, 2018 and March 31, 2018, respectively | 188,000 | 189,000 | ||||||||||||||
Common stock; par value $.01 per share, 50,000,000 shares authorized; 18,944,886 and 18,817,400 shares issued and outstanding at September 30, 2019 and March 31, 2019, respectively | 189,000 | 188,000 | ||||||||||||||
Additional paid-in capital | 211,593,000 | 213,609,000 | 216,430,000 | 215,047,000 | ||||||||||||
Retained earnings | 77,274,000 | 78,510,000 | 71,445,000 | 71,407,000 | ||||||||||||
Accumulated other comprehensive loss | (6,891,000 | ) | (5,428,000 | ) | (6,719,000 | ) | (6,887,000 | ) | ||||||||
Total shareholders’ equity | 282,164,000 | 286,880,000 | 281,345,000 | 279,755,000 | ||||||||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 584,013,000 | $ | 552,427,000 | $ | 712,558,000 | $ | 632,362,000 |
Three Months Ended | Six Months Ended | Three Months Ended September 30, | Six Months Ended September 30, | |||||||||||||||||||||||||||||
September 30, | September 30, | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||||||||||||||||||
(As Adjusted) | (As Adjusted) | |||||||||||||||||||||||||||||||
Net sales | $ | 127,939,000 | $ | 110,261,000 | $ | 219,607,000 | $ | 204,956,000 | $ | 150,374,000 | $ | 127,939,000 | $ | 259,522,000 | $ | 219,607,000 | ||||||||||||||||
Cost of goods sold | 102,228,000 | 84,234,000 | 177,544,000 | 153,077,000 | 113,801,000 | 102,228,000 | 205,366,000 | 177,544,000 | ||||||||||||||||||||||||
Gross profit | 25,711,000 | 26,027,000 | 42,063,000 | 51,879,000 | 36,573,000 | 25,711,000 | 54,156,000 | 42,063,000 | ||||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||||||
General and administrative | 8,997,000 | 8,615,000 | 21,088,000 | 14,503,000 | 14,285,000 | 8,997,000 | 26,285,000 | 21,088,000 | ||||||||||||||||||||||||
Sales and marketing | 4,537,000 | 3,457,000 | 8,929,000 | 6,851,000 | 5,448,000 | 4,537,000 | 10,367,000 | 8,929,000 | ||||||||||||||||||||||||
Research and development | 1,784,000 | 1,240,000 | 3,520,000 | 2,242,000 | 2,148,000 | 1,784,000 | 4,520,000 | 3,520,000 | ||||||||||||||||||||||||
Total operating expenses | 15,318,000 | 13,312,000 | 33,537,000 | 23,596,000 | 21,881,000 | 15,318,000 | 41,172,000 | 33,537,000 | ||||||||||||||||||||||||
Operating income | 10,393,000 | 12,715,000 | 8,526,000 | 28,283,000 | 14,692,000 | 10,393,000 | 12,984,000 | 8,526,000 | ||||||||||||||||||||||||
Interest expense, net | 5,699,000 | 3,522,000 | 10,774,000 | 6,836,000 | 6,523,000 | 5,699,000 | 12,696,000 | 10,774,000 | ||||||||||||||||||||||||
Income (loss) before income tax expense (benefit) | 4,694,000 | 9,193,000 | (2,248,000 | ) | 21,447,000 | 8,169,000 | 4,694,000 | 288,000 | (2,248,000 | ) | ||||||||||||||||||||||
Income tax expense (benefit) | 1,181,000 | 3,598,000 | (266,000 | ) | 8,032,000 | 1,980,000 | 1,181,000 | 250,000 | (266,000 | ) | ||||||||||||||||||||||
Net income (loss) | $ | 3,513,000 | $ | 5,595,000 | $ | (1,982,000 | ) | $ | 13,415,000 | $ | 6,189,000 | $ | 3,513,000 | $ | 38,000 | $ | (1,982,000 | ) | ||||||||||||||
Basic net income (loss) per share | $ | 0.19 | $ | 0.30 | $ | (0.10 | ) | $ | 0.72 | $ | 0.33 | $ | 0.19 | $ | 0.00 | $ | (0.10 | ) | ||||||||||||||
Diluted net income (loss) per share | $ | 0.18 | $ | 0.29 | $ | (0.10 | ) | $ | 0.69 | $ | 0.32 | $ | 0.18 | $ | 0.00 | $ | (0.10 | ) | ||||||||||||||
Weighted average number of shares outstanding: | Weighted average number of shares outstanding: | |||||||||||||||||||||||||||||||
Basic | 18,878,674 | 18,718,709 | 18,887,214 | 18,687,179 | 18,903,182 | 18,878,674 | 18,862,901 | 18,887,214 | ||||||||||||||||||||||||
Diluted | 19,319,465 | 19,356,809 | 18,887,214 | 19,371,144 | 19,217,327 | 19,319,465 | 19,246,599 | 18,887,214 |
Three Months Ended September 30, | Six Months Ended September 30, | Three Months Ended September 30, | Six Months Ended September 30, | |||||||||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||||||||||||||||||
(As Adjusted) | (As Adjusted) | |||||||||||||||||||||||||||||||
Net income (loss) | $ | 3,513,000 | $ | 5,595,000 | $ | (1,982,000 | ) | $ | 13,415,000 | $ | 6,189,000 | $ | 3,513,000 | $ | 38,000 | $ | (1,982,000 | ) | ||||||||||||||
Other comprehensive (loss) income, net of tax: | ||||||||||||||||||||||||||||||||
Unrealized gain on short-term investments (net of tax of $0, $40,000, $0 and $78,000) | - | 60,000 | - | 116,000 | ||||||||||||||||||||||||||||
Foreign currency translation (loss) gain | (2,000 | ) | 608,000 | (717,000 | ) | 837,000 | (431,000 | ) | (2,000 | ) | 168,000 | (717,000 | ) | |||||||||||||||||||
Total other comprehensive (loss) gain, net of tax | (2,000 | ) | 668,000 | (717,000 | ) | 953,000 | ||||||||||||||||||||||||||
Total other comprehensive (loss) income, net of tax | (431,000 | ) | (2,000 | ) | 168,000 | (717,000 | ) | |||||||||||||||||||||||||
Comprehensive income (loss) | $ | 3,511,000 | $ | 6,263,000 | $ | (2,699,000 | ) | $ | 14,368,000 | $ | 5,758,000 | $ | 3,511,000 | $ | 206,000 | $ | (2,699,000 | ) |
Six Months Ended September 30, | ||||||||
2018 | 2017 | |||||||
Cash flows from operating activities: | (As Adjusted) | |||||||
Net (loss) income | $ | (1,982,000 | ) | $ | 13,415,000 | |||
Adjustments to reconcile net (loss) income to net cash used in operating activities: | ||||||||
Depreciation | 2,834,000 | 1,828,000 | ||||||
Amortization of intangible assets | 384,000 | 325,000 | ||||||
Amortization and write-off of debt issuance costs | 647,000 | 426,000 | ||||||
Amortization of interest on contract liabilities, net | 513,000 | 269,000 | ||||||
Gain due to change in fair value of the warrant liability | - | (2,313,000 | ) | |||||
Gain on short-term investments | (180,000 | ) | - | |||||
Net provision for inventory reserves | 5,285,000 | 3,258,000 | ||||||
Net provision for customer payment discrepancies | 274,000 | 604,000 | ||||||
Net provision for (recovery of) doubtful accounts | 206,000 | (2,000 | ) | |||||
Deferred income taxes | (667,000 | ) | (207,000 | ) | ||||
Share-based compensation expense | 2,121,000 | 1,744,000 | ||||||
Loss on disposal of plant and equipment | 11,000 | 7,000 | ||||||
Changes in operating assets and liabilities, net of effects of acquisitions: | ||||||||
Accounts receivable | 6,598,000 | 2,819,000 | ||||||
Inventory | (32,380,000 | ) | (28,552,000 | ) | ||||
Inventory unreturned | (1,592,000 | ) | (123,000 | ) | ||||
Income tax receivable | (3,595,000 | ) | (3,985,000 | ) | ||||
Prepaid expenses and other current assets | (658,000 | ) | (2,645,000 | ) | ||||
Other assets | (79,000 | ) | (20,000 | ) | ||||
Accounts payable and accrued liabilities | 17,840,000 | (3,764,000 | ) | |||||
Customer finished goods returns accrual | 2,156,000 | (4,246,000 | ) | |||||
Contract assets, net | (8,773,000 | ) | 6,882,000 | |||||
Contract liabilities, net | 2,724,000 | 5,837,000 | ||||||
Other liabilities | 1,904,000 | 295,000 | ||||||
Net cash used in operating activities | (6,409,000 | ) | (8,148,000 | ) | ||||
Cash flows from investing activities: | ||||||||
Purchase of plant and equipment | (5,259,000 | ) | (2,460,000 | ) | ||||
Purchase of business, net of cash acquired | - | (4,974,000 | ) | |||||
Change in short-term investments | (222,000 | ) | (226,000 | ) | ||||
Net cash used in investing activities | (5,481,000 | ) | (7,660,000 | ) | ||||
Cash flows from financing activities: | ||||||||
Borrowings under revolving loan | 35,200,000 | 52,000,000 | ||||||
Repayments of revolving loan | (36,294,000 | ) | (27,000,000 | ) | ||||
Borrowings under term loan | 13,594,000 | - | ||||||
Repayments of term loan | (782,000 | ) | (1,563,000 | ) | ||||
Payments for debt issuance costs | (1,757,000 | ) | (443,000 | ) | ||||
Payments on capital lease obligations | (711,000 | ) | (392,000 | ) | ||||
Exercise of stock options | 244,000 | 295,000 | ||||||
Cash used to net share settle equity awards | (320,000 | ) | (594,000 | ) | ||||
Settlement of warrant | - | 4,000,000 | ||||||
Repurchase of common stock, including fees | (4,062,000 | ) | (4,476,000 | ) | ||||
Net cash provided by financing activities | 5,112,000 | 21,827,000 | ||||||
Effect of exchange rate changes on cash and cash equivalents | (96,000 | ) | 42,000 | |||||
Net (decrease) increase in cash and cash equivalents | (6,874,000 | ) | 6,061,000 | |||||
Cash and cash equivalents — Beginning of period | 13,049,000 | 9,029,000 | ||||||
Cash and cash equivalents — End of period | $ | 6,175,000 | $ | 15,090,000 | ||||
Supplemental disclosures of cash flow information: | ||||||||
Cash paid during the period for: | ||||||||
Interest, net | $ | 9,534,000 | $ | 6,121,000 | ||||
Income taxes, net of refunds | 3,263,000 | 11,672,000 | ||||||
Non-cash investing and financing activities: | ||||||||
Plant and equipment acquired under capital lease | $ | - | $ | 498,000 |
Common Stock | ||||||||||||||||||||||||
Shares | Amount | Additional Paid-in Capital Common Stock | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total | |||||||||||||||||||
Balance at March 31, 2019 | 18,817,400 | $ | 188,000 | $ | 215,047,000 | $ | 71,407,000 | $ | (6,887,000 | ) | $ | 279,755,000 | ||||||||||||
Compensation recognized under employee stock plans | - | - | 988,000 | - | - | 988,000 | ||||||||||||||||||
Issuance of common stock upon vesting of RSUs, net of shares withheld for employee taxes | 36,872 | 1,000 | (363,000 | ) | - | - | (362,000 | ) | ||||||||||||||||
Foreign currency translation | - | - | - | - | 599,000 | 599,000 | ||||||||||||||||||
Net loss | - | - | - | (6,151,000 | ) | - | (6,151,000 | ) | ||||||||||||||||
Balance at June 30, 2019 | 18,854,272 | $ | 189,000 | $ | 215,672,000 | $ | 65,256,000 | $ | (6,288,000 | ) | $ | 274,829,000 | ||||||||||||
Compensation recognized under employee stock plans | - | - | 1,053,000 | - | - | 1,053,000 | ||||||||||||||||||
Exercise of stock options | 52,800 | - | 405,000 | - | - | 405,000 | ||||||||||||||||||
Issuance of common stock upon vesting of RSUs, net of shares withheld for employee taxes | 37,814 | - | (700,000 | ) | - | - | (700,000 | ) | ||||||||||||||||
Foreign currency translation | - | - | - | - | (431,000 | ) | (431,000 | ) | ||||||||||||||||
Net income | - | - | - | 6,189,000 | - | 6,189,000 | ||||||||||||||||||
Balance at September 30, 2019 | 18,944,886 | $ | 189,000 | $ | 216,430,000 | $ | 71,445,000 | $ | (6,719,000 | ) | $ | 281,345,000 |
Common Stock | ||||||||||||||||||||||||
Shares | Amount | Additional Paid-in Capital Common Stock | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total | |||||||||||||||||||
Balance at March 31, 2018 | 18,893,102 | $ | 189,000 | $ | 213,609,000 | $ | 78,510,000 | $ | (5,428,000 | ) | $ | 286,880,000 | ||||||||||||
Cumulative-effect adjustment for the adoption of ASU 2016-01 | - | - | - | 746,000 | (746,000 | ) | - | |||||||||||||||||
Balance at April 1, 2018 | 18,893,102 | $ | 189,000 | $ | 213,609,000 | $ | 79,256,000 | $ | (6,174,000 | ) | $ | 286,880,000 | ||||||||||||
Compensation recognized under employee stock plans | - | - | 941,000 | - | - | 941,000 | ||||||||||||||||||
Issuance of common stock upon vesting of RSUs, net of shares withheld for employee taxes | 23,006 | - | (192,000 | ) | - | - | (192,000 | ) | ||||||||||||||||
Foreign currency translation | - | - | - | - | (715,000 | ) | (715,000 | ) | ||||||||||||||||
Net loss | - | - | - | (5,495,000 | ) | - | (5,495,000 | ) | ||||||||||||||||
Balance at June 30, 2018 | 18,916,108 | $ | 189,000 | $ | 214,358,000 | $ | 73,761,000 | $ | (6,889,000 | ) | $ | 281,419,000 | ||||||||||||
Compensation recognized under employee stock plans | - | - | 1,180,000 | - | - | 1,180,000 | ||||||||||||||||||
Exercise of stock options | 39,032 | 1,000 | 243,000 | - | - | 244,000 | ||||||||||||||||||
Issuance of common stock upon vesting of RSUs, net of shares withheld for employee taxes | 8,152 | - | (128,000 | ) | - | - | (128,000 | ) | ||||||||||||||||
Repurchase and cancellation of treasury stock, including fees | (163,815 | ) | (2,000 | ) | (4,060,000 | ) | - | - | (4,062,000 | ) | ||||||||||||||
Foreign currency translation | - | - | - | - | (2,000 | ) | (2,000 | ) | ||||||||||||||||
Net income | - | - | - | 3,513,000 | - | 3,513,000 | ||||||||||||||||||
Balance at September 30, 2018 | 18,799,477 | $ | 188,000 | $ | 211,593,000 | $ | 77,274,000 | $ | (6,891,000 | ) | $ | 282,164,000 |
Six Months Ended September 30, | ||||||||
2019 | 2018 | |||||||
Cash flows from operating activities: | ||||||||
Net income (loss) | $ | 38,000 | $ | (1,982,000 | ) | |||
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||
Depreciation and amortization | 3,631,000 | 2,834,000 | ||||||
Amortization of intangible assets | 988,000 | 384,000 | ||||||
Amortization and write-off of debt issuance costs | 383,000 | 647,000 | ||||||
Amortization of interest on contract liabilities, net | 478,000 | 513,000 | ||||||
Noncash lease expense | 2,431,000 | - | ||||||
Loss due to the change in the fair value of the contingent consideration | 123,000 | - | ||||||
Loss due to the remeasurement of lease liabilities | 637,000 | - | ||||||
Gain on short-term investments | (136,000 | ) | (180,000 | ) | ||||
Net provision for inventory reserves | 6,656,000 | 5,285,000 | ||||||
Net provision for customer payment discrepancies | 721,000 | 274,000 | ||||||
Net provision for doubtful accounts | 106,000 | 206,000 | ||||||
Deferred income taxes | (638,000 | ) | (667,000 | ) | ||||
Share-based compensation expense | 2,041,000 | 2,121,000 | ||||||
Loss on disposal of plant and equipment | 3,000 | 11,000 | ||||||
Changes in operating assets and liabilities, net of effects of acquisitions: | ||||||||
Accounts receivable | (14,672,000 | ) | 6,598,000 | |||||
Inventory | (23,254,000 | ) | (32,380,000 | ) | ||||
Inventory unreturned | (215,000 | ) | (1,592,000 | ) | ||||
Income tax receivable | (200,000 | ) | (3,595,000 | ) | ||||
Prepaid expenses and other current assets | 506,000 | (658,000 | ) | |||||
Other assets | 182,000 | (79,000 | ) | |||||
Accounts payable and accrued liabilities | (6,600,000 | ) | 17,840,000 | |||||
Customer finished goods returns accrual | 1,005,000 | 2,156,000 | ||||||
Contract assets, net | 261,000 | (8,773,000 | ) | |||||
Contract liabilities, net | 1,405,000 | 2,724,000 | ||||||
Operating lease liabilities | (2,107,000 | ) | - | |||||
Other liabilities | (509,000 | ) | 1,904,000 | |||||
Net cash used in operating activities | (26,736,000 | ) | (6,409,000 | ) | ||||
Cash flows from investing activities: | ||||||||
Purchase of plant and equipment | (6,943,000 | ) | (5,259,000 | ) | ||||
Proceeds from sale of plant and equipment | 26,000 | - | ||||||
Change in short-term investments | 1,216,000 | (222,000 | ) | |||||
Net cash used in investing activities | (5,701,000 | ) | (5,481,000 | ) | ||||
Cash flows from financing activities: | ||||||||
Borrowings under revolving loan | 42,000,000 | 35,200,000 | ||||||
Repayments of revolving loan | (8,400,000 | ) | (36,294,000 | ) | ||||
Borrowings under term loan | - | 13,594,000 | ||||||
Repayments of term loan | (1,875,000 | ) | (782,000 | ) | ||||
Payments for debt issuance costs | (901,000 | ) | (1,757,000 | ) | ||||
Payments on finance lease obligations | (1,108,000 | ) | (711,000 | ) | ||||
Exercise of stock options | 405,000 | 244,000 | ||||||
Cash used to net share settle equity awards | (1,062,000 | ) | (320,000 | ) | ||||
Repurchase of common stock, including fees | - | (4,062,000 | ) | |||||
Net cash provided by financing activities | 29,059,000 | 5,112,000 | ||||||
Effect of exchange rate changes on cash and cash equivalents | (78,000 | ) | (96,000 | ) | ||||
Net decrease in cash and cash equivalents | (3,456,000 | ) | (6,874,000 | ) | ||||
Cash and cash equivalents — Beginning of period | 9,911,000 | 13,049,000 | ||||||
Cash and cash equivalents — End of period | $ | 6,455,000 | $ | 6,175,000 | ||||
Supplemental disclosures of cash flow information: | ||||||||
Cash paid for interest, net | $ | 11,859,000 | $ | 9,534,000 | ||||
Cash paid for income taxes, net of refunds | - | 3,263,000 | ||||||
Cash paid for operating leases | 3,538,000 | - | ||||||
Cash paid for finance leases | 1,249,000 | - | ||||||
Plant and equipment acquired under finance leases | 2,308,000 | $ | - | |||||
Assets acquired under operating leases | 1,497,000 | - |
1. | Company Background and Organization |
2. | Basis of Presentation and New Accounting Pronouncements |
Year Ended March 31, 2018 | ||||||||||||
Revised Consolidated Statement of Operations Amounts: | As Previously Reported | Adjustment | As Revised | |||||||||
Net sales | $ | 428,072,000 | $ | (1,081,000 | ) | $ | 426,991,000 | |||||
Cost of goods sold | 322,199,000 | (1,750,000 | ) | 320,449,000 | ||||||||
Gross profit | 105,873,000 | 669,000 | 106,542,000 | |||||||||
Operating expenses: | ||||||||||||
General and administrative | 35,527,000 | (50,000 | ) | 35,477,000 | ||||||||
Sales and marketing | 15,030,000 | - | 15,030,000 | |||||||||
Research and development | 5,692,000 | - | 5,692,000 | |||||||||
Total operating expenses | 56,249,000 | (50,000 | ) | 56,199,000 | ||||||||
Operating income | 49,624,000 | 719,000 | 50,343,000 | |||||||||
Interest expense, net | 15,445,000 | - | 15,445,000 | |||||||||
Income before income tax expense (benefit) | 34,179,000 | 719,000 | 34,898,000 | |||||||||
Income tax expense (benefit) | 17,863,000 | (1,791,000 | ) | 16,072,000 | ||||||||
Net income | $ | 16,316,000 | $ | 2,510,000 | $ | 18,826,000 | ||||||
Basic net income per share | $ | 0.87 | $ | 0.13 | $ | 1.00 | ||||||
Diluted net income per share | $ | 0.84 | $ | 0.13 | $ | 0.96 |
Year Ended March 31, 2017 | ||||||||||||
Revised Consolidated Statement of Operations Amounts: | As Previously Reported | Adjustment | As Revised | |||||||||
Net sales | $ | 421,253,000 | $ | 1,629,000 | $ | 422,882,000 | ||||||
Cost of goods sold | 306,207,000 | (281,000 | ) | 305,926,000 | ||||||||
Gross profit | 115,046,000 | 1,910,000 | 116,956,000 | |||||||||
Operating expenses: | ||||||||||||
General and administrative | 31,124,000 | 1,000 | 31,125,000 | |||||||||
Sales and marketing | 12,126,000 | - | 12,126,000 | |||||||||
Research and development | 3,824,000 | - | 3,824,000 | |||||||||
Total operating expenses | 47,074,000 | 1,000 | 47,075,000 | |||||||||
Operating income | 67,972,000 | 1,909,000 | 69,881,000 | |||||||||
Interest expense, net | 13,094,000 | - | 13,094,000 | |||||||||
Income before income tax expense | 54,878,000 | 1,909,000 | 56,787,000 | |||||||||
Income tax expense | 17,305,000 | 706,000 | 18,011,000 | |||||||||
Net income | $ | 37,573,000 | $ | 1,203,000 | $ | 38,776,000 | ||||||
Basic net income per share | $ | 2.02 | $ | 0.06 | $ | 2.08 | ||||||
Diluted net income per share | $ | 1.93 | $ | 0.06 | $ | 2.00 |
Year Ended March 31, 2016 | ||||||||||||
Revised Consolidated Statement of Operations Amounts: | As Previously Reported | Adjustment | As Revised | |||||||||
Net sales | $ | 368,970,000 | $ | 700,000 | $ | 369,670,000 | ||||||
Cost of goods sold | 268,046,000 | 402,000 | 268,448,000 | |||||||||
Gross profit | 100,924,000 | 298,000 | 101,222,000 | |||||||||
Operating expenses: | ||||||||||||
General and administrative | 49,665,000 | 298,000 | 49,963,000 | |||||||||
Sales and marketing | 9,965,000 | - | 9,965,000 | |||||||||
Research and development | 3,008,000 | - | 3,008,000 | |||||||||
Total operating expenses | 62,638,000 | 298,000 | 62,936,000 | |||||||||
Operating income | 38,286,000 | - | 38,286,000 | |||||||||
Interest expense, net | 16,244,000 | - | 16,244,000 | |||||||||
Income before income tax expense | 22,042,000 | - | 22,042,000 | |||||||||
Income tax expense | 11,479,000 | 294,000 | 11,773,000 | |||||||||
Net income | $ | 10,563,000 | $ | (294,000 | ) | $ | 10,269,000 | |||||
Basic net income per share | $ | 0.58 | $ | (0.02 | ) | $ | 0.56 | |||||
Diluted net income per share | $ | 0.55 | $ | (0.02 | ) | $ | 0.54 |
Year Ended March 31, 2018 | ||||||||||||
Revised Consolidated Statement of Comprehensive Income Amounts: | As Previously Reported | Adjustment | As Revised | |||||||||
Net income | $ | 16,316,000 | $ | 2,510,000 | $ | 18,826,000 | ||||||
Comprehensive income | $ | 18,329,000 | $ | 2,510,000 | $ | 20,839,000 |
Year Ended March 31, 2017 | ||||||||||||
Revised Consolidated Statement of Comprehensive Income Amounts: | As Previously Reported | Adjustment | As Revised | |||||||||
Net income | $ | 37,573,000 | $ | 1,203,000 | $ | 38,776,000 | ||||||
Comprehensive income | $ | 34,984,000 | $ | 1,203,000 | $ | 36,187,000 |
Year Ended March 31, 2016 | ||||||||||||
Revised Consolidated Statement of Comprehensive Income Amounts: | As Previously Reported | Adjustment | As Revised | |||||||||
Net income | $ | 10,563,000 | $ | (294,000 | ) | $ | 10,269,000 | |||||
Comprehensive income | $ | 8,229,000 | $ | (294,000 | ) | $ | 7,935,000 |
March 31, 2018 | ||||||||||||
Revised Consolidated Balance Sheet Amounts: | As Previously Reported | Adjustment | As Revised | |||||||||
ASSETS | ||||||||||||
Income tax receivable | $ | 7,796,000 | $ | 176,000 | $ | 7,972,000 | ||||||
Prepaid expenses and other current assets | 11,491,000 | 3,613,000 | 15,104,000 | |||||||||
Long-term core inventory — net | 301,656,000 | (3,362,000 | ) | 298,294,000 | ||||||||
Long-term deferred income taxes | 10,556,000 | (3,619,000 | ) | 6,937,000 | ||||||||
Other assets | 7,392,000 | 14,603,000 | 21,995,000 | |||||||||
TOTAL ASSETS | $ | 494,497,000 | $ | 11,411,000 | $ | 505,908,000 | ||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||
Accrued liabilities | $ | 11,799,000 | $ | 249,000 | $ | 12,048,000 | ||||||
TOTAL LIABILITIES | $ | 219,521,000 | $ | 249,000 | $ | 219,770,000 | ||||||
Retained earnings | $ | 66,606,000 | $ | 11,162,000 | $ | 77,768,000 | ||||||
TOTAL SHAREHOLDERS’ EQUITY | $ | 274,976,000 | $ | 11,162,000 | $ | 286,138,000 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 494,497,000 | $ | 11,411,000 | $ | 505,908,000 |
March 31, 2017 | ||||||||||||
Revised Consolidated Balance Sheet Amounts: | As Previously Reported | Adjustment | As Revised | |||||||||
ASSETS | ||||||||||||
Prepaid expenses and other current assets | $ | 9,848,000 | $ | 3,240,000 | $ | 13,088,000 | ||||||
Long-term core inventory — net | 262,922,000 | (4,501,000 | ) | 258,421,000 | ||||||||
Long-term deferred income taxes | 13,546,000 | (5,179,000 | ) | 8,367,000 | ||||||||
Other assets | 6,990,000 | 15,391,000 | 22,381,000 | |||||||||
TOTAL ASSETS | $ | 436,139,000 | $ | 8,951,000 | $ | 445,090,000 | ||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||
Accrued liabilities | $ | 10,077,000 | $ | 299,000 | $ | 10,376,000 | ||||||
TOTAL LIABILITIES | $ | 187,458,000 | $ | 299,000 | $ | 187,757,000 | ||||||
Retained earnings | $ | 50,290,000 | $ | 8,652,000 | $ | 58,942,000 | ||||||
TOTAL SHAREHOLDERS’ EQUITY | $ | 248,681,000 | $ | 8,652,000 | $ | 257,333,000 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 436,139,000 | $ | 8,951,000 | $ | 445,090,000 |
Year Ended March 31, 2018 | ||||||||||||
Revised Consolidated Statement of Shareholders’ Equity Amounts: | As Previously Reported | Adjustment | As Revised | |||||||||
Retained earnings at March 31, 2017 | $ | 50,290,000 | $ | 8,652,000 | $ | 58,942,000 | ||||||
Net income | 16,316,000 | 2,510,000 | 18,826,000 | |||||||||
Retained earnings at March 31, 2018 | $ | 66,606,000 | $ | 11,162,000 | $ | 77,768,000 |
Year Ended March 31, 2017 | ||||||||||||
Revised Consolidated Statement of Shareholders’ Equity Amounts: | As Previously Reported | Adjustment | As Revised | |||||||||
Retained earnings at March 31, 2016 | $ | 11,825,000 | $ | 7,449,000 | $ | 19,274,000 | ||||||
Cumulative effect adjustment | 892,000 | - | 892,000 | |||||||||
Net income | 37,573,000 | 1,203,000 | 38,776,000 | |||||||||
Retained earnings at March 31, 2017 | $ | 50,290,000 | $ | 8,652,000 | $ | 58,942,000 |
Year Ended March 31, 2016 | ||||||||||||
Revised Consolidated Statement of Shareholders’ Equity Amounts: | As Previously Reported | Adjustment | As Revised | |||||||||
Retained earnings at March 31, 2015 | $ | 1,262,000 | $ | - | $ | 1,262,000 | ||||||
Cumulative effect adjustment of error corrections | - | 7,743,000 | 7,743,000 | |||||||||
Net income (loss) | 10,563,000 | (294,000 | ) | 10,269,000 | ||||||||
Retained earnings at March 31, 2016 | $ | 11,825,000 | $ | 7,449,000 | $ | 19,274,000 |
Year Ended March 31, 2018 | ||||||||||||
Revised Consolidated Statement of Cash Flow from Operating Activities Amounts: | As Previously Reported | Adjustment | As Revised | |||||||||
Net income | $ | 16,316,000 | $ | 2,510,000 | $ | 18,826,000 | ||||||
Deferred income taxes | 3,055,000 | (1,560,000 | ) | 1,495,000 | ||||||||
Income tax receivable | (6,081,000 | ) | (231,000 | ) | (6,312,000 | ) | ||||||
Prepaid expenses and other current assets | (2,507,000 | ) | (318,000 | ) | (2,825,000 | ) | ||||||
Other assets | (384,000 | ) | 788,000 | 404,000 | ||||||||
Accounts payable and accrued liabilities | (11,621,000 | ) | (50,000 | ) | (11,671,000 | ) | ||||||
Long-term core inventory | (45,839,000 | ) | (1,139,000 | ) | (46,978,000 | ) | ||||||
Net cash used in operating activities | $ | (13,944,000 | ) | $ | - | $ | (13,944,000 | ) |
Year Ended March 31, 2017 | ||||||||||||
Revised Consolidated Statement of Cash Flow from Operating Activities Amounts: | As Previously Reported | Adjustment | As Revised | |||||||||
Net income | $ | 37,573,000 | $ | 1,203,000 | $ | 38,776,000 | ||||||
Deferred income taxes | 6,510,000 | 355,000 | 6,865,000 | |||||||||
Prepaid expenses and other current assets | (4,333,000 | ) | (549,000 | ) | (4,882,000 | ) | ||||||
Other assets | (3,339,000 | ) | (1,025,000 | ) | (4,364,000 | ) | ||||||
Accounts payable and accrued liabilities | 12,446,000 | 1,000 | 12,447,000 | |||||||||
Long-term core inventory | (24,964,000 | ) | (281,000 | ) | (25,245,000 | ) | ||||||
Other liabilities | (1,344,000 | ) | 296,000 | (1,048,000 | ) | |||||||
Net cash used in operating activities | $ | (5,269,000 | ) | $ | - | $ | (5,269,000 | ) |
Year Ended March 31, 2016 | ||||||||||||
Revised Consolidated Statement of Cash Flow from Operating Activities Amounts: | As Previously Reported | Adjustment | As Revised | |||||||||
Net income | $ | 10,563,000 | $ | (294,000 | ) | $ | 10,269,000 | |||||
Deferred income taxes | (3,781,000 | ) | 590,000 | (3,191,000 | ) | |||||||
Prepaid expenses and other current assets | 2,765,000 | 618,000 | 3,383,000 | |||||||||
Other assets | (477,000 | ) | (1,318,000 | ) | (1,795,000 | ) | ||||||
Accounts payable and accrued liabilities | 6,620,000 | 298,000 | 6,918,000 | |||||||||
Long-term core inventory | (53,408,000 | ) | 402,000 | (53,006,000 | ) | |||||||
Other liabilities | 1,673,000 | (296,000 | ) | 1,377,000 | ||||||||
Net cash used in operating activities | $ | 15,334,000 | $ | - | $ | 15,334,000 |
Three Months Ended June 30, 2017 | ||||||||||||
Revised Consolidated Statement of Operations Amounts: | As Previously Reported | Adjustment | As Revised | |||||||||
Net sales | $ | 95,063,000 | $ | (824,000 | ) | $ | 94,239,000 | |||||
Cost of goods sold | 69,224,000 | - | 69,224,000 | |||||||||
Gross profit | 25,839,000 | (824,000 | ) | 25,015,000 | ||||||||
Operating expenses: | ||||||||||||
General and administrative | 6,187,000 | (299,000 | ) | 5,888,000 | ||||||||
Sales and marketing | 3,394,000 | - | 3,394,000 | |||||||||
Research and development | 1,002,000 | - | 1,002,000 | |||||||||
Total operating expenses | 10,583,000 | (299,000 | ) | 10,284,000 | ||||||||
Operating income | 15,256,000 | (525,000 | ) | 14,731,000 | ||||||||
Interest expense, net | 3,314,000 | - | 3,314,000 | |||||||||
Income (loss) before income tax expense (benefit) | 11,942,000 | (525,000 | ) | 11,417,000 | ||||||||
Income tax expense (benefit) | 4,316,000 | (194,000 | ) | 4,122,000 | ||||||||
Net income (loss) | $ | 7,626,000 | $ | (331,000 | ) | $ | 7,295,000 | |||||
Basic net income (loss) per share | $ | 0.41 | $ | (0.02 | ) | $ | 0.39 | |||||
Diluted net income (loss) per share | $ | 0.39 | $ | (0.02 | ) | $ | 0.38 |
Three Months Ended September 30, 2017 | Six Months Ended September 30, 2017 | |||||||||||||||||||||||
Revised Consolidated Statement of Operations Amounts: | As Previously Reported | Adjustment | As Revised | As Previously Reported | Adjustment | As Revised | ||||||||||||||||||
Net sales | $ | 111,774,000 | $ | (921,000 | ) | $ | 110,853,000 | $ | 206,837,000 | $ | (1,745,000 | ) | $ | 205,092,000 | ||||||||||
Cost of goods sold | 84,612,000 | - | 84,612,000 | 153,836,000 | - | 153,836,000 | ||||||||||||||||||
Gross profit | 27,162,000 | (921,000 | ) | 26,241,000 | 53,001,000 | (1,745,000 | ) | 51,256,000 | ||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||
General and administrative | 8,615,000 | - | 8,615,000 | 14,802,000 | (299,000 | ) | 14,503,000 | |||||||||||||||||
Sales and marketing | 3,457,000 | - | 3,457,000 | 6,851,000 | - | 6,851,000 | ||||||||||||||||||
Research and development | 1,240,000 | - | 1,240,000 | 2,242,000 | - | 2,242,000 | ||||||||||||||||||
Total operating expenses | 13,312,000 | - | 13,312,000 | 23,895,000 | (299,000 | ) | 23,596,000 | |||||||||||||||||
Operating income (loss) | 13,850,000 | (921,000 | ) | 12,929,000 | 29,106,000 | (1,446,000 | ) | 27,660,000 | ||||||||||||||||
Interest expense, net | 3,522,000 | - | 3,522,000 | 6,836,000 | - | 6,836,000 | ||||||||||||||||||
Income (loss) before income tax expense (benefit) | 10,328,000 | (921,000 | ) | 9,407,000 | 22,270,000 | (1,446,000 | ) | 20,824,000 | ||||||||||||||||
Income tax expense (benefit) | 4,027,000 | (343,000 | ) | 3,684,000 | 8,343,000 | (537,000 | ) | 7,806,000 | ||||||||||||||||
Net income (loss) | $ | 6,301,000 | $ | (578,000 | ) | $ | 5,723,000 | $ | 13,927,000 | $ | (909,000 | ) | $ | 13,018,000 | ||||||||||
Basic net income (loss) per share | $ | 0.34 | $ | (0.03 | ) | $ | 0.31 | $ | 0.75 | $ | (0.05 | ) | $ | 0.70 | ||||||||||
Diluted net income (loss) per share | $ | 0.33 | $ | (0.03 | ) | $ | 0.30 | $ | 0.72 | $ | (0.05 | ) | $ | 0.67 |
Three Months Ended December 31, 2017 | Nine Months Ended December 31, 2017 | |||||||||||||||||||||||
Revised Consolidated Statement of Operations Amounts: | As Previously Reported | Adjustment | As Revised | As Previously Reported | Adjustment | As Revised | ||||||||||||||||||
Net sales | $ | 100,127,000 | $ | 1,586,000 | $ | 101,713,000 | $ | 306,964,000 | $ | (159,000 | ) | $ | 306,805,000 | |||||||||||
Cost of goods sold | 77,583,000 | (1,750,000 | ) | 75,833,000 | 231,419,000 | (1,750,000 | ) | 229,669,000 | ||||||||||||||||
Gross profit | 22,544,000 | 3,336,000 | 25,880,000 | 75,545,000 | 1,591,000 | 77,136,000 | ||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||
General and administrative | 11,915,000 | - | 11,915,000 | 26,717,000 | (299,000 | ) | 26,418,000 | |||||||||||||||||
Sales and marketing | 4,048,000 | - | 4,048,000 | 10,899,000 | - | 10,899,000 | ||||||||||||||||||
Research and development | 1,678,000 | - | 1,678,000 | 3,920,000 | - | 3,920,000 | ||||||||||||||||||
Total operating expenses | 17,641,000 | - | 17,641,000 | 41,536,000 | (299,000 | ) | 41,237,000 | |||||||||||||||||
Operating income | 4,903,000 | 3,336,000 | 8,239,000 | 34,009,000 | 1,890,000 | 35,899,000 | ||||||||||||||||||
Interest expense, net | 3,953,000 | - | 3,953,000 | 10,789,000 | - | 10,789,000 | ||||||||||||||||||
Income before income tax expense (benefit) | 950,000 | 3,336,000 | 4,286,000 | 23,220,000 | 1,890,000 | 25,110,000 | ||||||||||||||||||
Income tax expense (benefit) | 7,756,000 | (820,000 | ) | 6,936,000 | 16,099,000 | (1,357,000 | ) | 14,742,000 | ||||||||||||||||
Net (loss) income | $ | (6,806,000 | ) | $ | 4,156,000 | $ | (2,650,000 | ) | $ | 7,121,000 | $ | 3,247,000 | $ | 10,368,000 | ||||||||||
Basic net (loss) income per share | $ | (0.36 | ) | $ | 0.22 | $ | (0.14 | ) | $ | 0.38 | $ | 0.17 | $ | 0.55 | ||||||||||
Diluted net (loss) income per share | $ | (0.36 | ) | $ | 0.22 | $ | (0.14 | ) | $ | 0.37 | $ | 0.17 | $ | 0.53 |
Three Months Ended June 30, 2017 | ||||||||||||
Revised Consolidated Statement of Comprehensive Income (Loss) Amounts: | As Previously Reported | Adjustment | As Revised | |||||||||
Net income (loss) | $ | 7,626,000 | $ | (331,000 | ) | $ | 7,295,000 | |||||
Comprehensive income (loss) | $ | 7,911,000 | $ | (331,000 | ) | $ | 7,580,000 |
Three Months Ended September 30, 2017 | Six Months Ended September 30, 2017 | |||||||||||||||||||||||
Revised Consolidated Statement of Comprehensive Income (Loss) Amounts: | As Previously Reported | Adjustment | As Revised | As Previously Reported | Adjustment | As Revised | ||||||||||||||||||
Net income (loss) | $ | 6,301,000 | $ | (578,000 | ) | $ | 5,723,000 | $ | 13,927,000 | $ | (909,000 | ) | $ | 13,018,000 | ||||||||||
Comprehensive income (loss) | $ | 6,969,000 | $ | (578,000 | ) | $ | 6,391,000 | $ | 14,880,000 | $ | (909,000 | ) | $ | 13,971,000 |
Three Months Ended December 31, 2017 | Nine Months Ended December 31, 2017 | |||||||||||||||||||||||
Revised Consolidated Statement of Comprehensive (Loss) Income Amounts: | As Previously Reported | Adjustment | As Revised | As Previously Reported | Adjustment | As Revised | ||||||||||||||||||
Net (loss) income | $ | (6,806,000 | ) | $ | 4,156,000 | $ | (2,650,000 | ) | $ | 7,121,000 | $ | 3,247,000 | $ | 10,368,000 | ||||||||||
Comprehensive (loss) income | $ | (6,476,000 | ) | $ | 4,156,000 | $ | (2,320,000 | ) | $ | 8,404,000 | $ | 3,247,000 | $ | 11,651,000 |
Three Months Ended June 30, 2017 | ||||||||||||
Revised Consolidated Statement of Cash Flow from Operating Activities Amounts: | As Previously Reported | Adjustment | As Revised | |||||||||
Net income (loss) | $ | 7,626,000 | $ | (331,000 | ) | $ | 7,295,000 | |||||
Prepaid expenses and other current assets | 421,000 | (55,000 | ) | 366,000 | ||||||||
Other assets | 608,000 | 824,000 | 1,432,000 | |||||||||
Accounts payable and accrued liabilities | (5,254,000 | ) | (299,000 | ) | (5,553,000 | ) | ||||||
Other liabilities | 2,324,000 | (139,000 | ) | 2,185,000 | ||||||||
Net cash used in operating activities | $ | (644,000 | ) | $ | - | $ | (644,000 | ) |
Six Months Ended September 30, 2017 | ||||||||||||
Revised Consolidated Statement of Cash Flow from Operating Activities Amounts: | As Previously Reported | Adjustment | As Revised | |||||||||
Net income (loss) | $ | 13,927,000 | $ | (909,000 | ) | $ | 13,018,000 | |||||
Prepaid expenses and other current assets | (6,093,000 | ) | (537,000 | ) | (6,630,000 | ) | ||||||
Other assets | 1,198,000 | 1,745,000 | 2,943,000 | |||||||||
Accounts payable and accrued liabilities | (3,465,000 | ) | (299,000 | ) | (3,764,000 | ) | ||||||
Net cash used in operating activities | $ | (8,148,000 | ) | $ | - | $ | (8,148,000 | ) |
Nine Months Ended December 31, 2017 | ||||||||||||
Revised Consolidated Statement of Cash Flow from Operating Activities Amounts: | As Previously Reported | Adjustment | As Revised | |||||||||
Net income | $ | 7,121,000 | $ | 3,247,000 | $ | 10,368,000 | ||||||
Deferred income taxes | (909,000 | ) | (1,805,000 | ) | (2,714,000 | ) | ||||||
Prepaid expenses and other current assets | (2,093,000 | ) | 448,000 | (1,645,000 | ) | |||||||
Other assets | 289,000 | (452,000 | ) | (163,000 | ) | |||||||
Accounts payable and accrued liabilities | (15,647,000 | ) | (299,000 | ) | (15,946,000 | ) | ||||||
Long-term core inventory | (37,222,000 | ) | (1,139,000 | ) | (38,361,000 | ) | ||||||
Net cash used in operating activities | $ | (9,803,000 | ) | $ | - | $ | (9,803,000 | ) |
Three Months Ended June 30, 2018 | ||||||||||||
Revised Consolidated Statement of Operations Amounts: | As Previously Reported | Adjustment | As Revised | |||||||||
Net sales | $ | 92,565,000 | $ | (897,000 | ) | $ | 91,668,000 | |||||
Cost of goods sold | 75,314,000 | 2,000 | 75,316,000 | |||||||||
Gross profit | 17,251,000 | (899,000 | ) | 16,352,000 | ||||||||
Operating expenses: | ||||||||||||
General and administrative | 12,340,000 | (249,000 | ) | 12,091,000 | ||||||||
Sales and marketing | 4,392,000 | - | 4,392,000 | |||||||||
Research and development | 1,736,000 | - | 1,736,000 | |||||||||
Total operating expenses | 18,468,000 | (249,000 | ) | 18,219,000 | ||||||||
Operating loss | (1,217,000 | ) | (650,000 | ) | (1,867,000 | ) | ||||||
Interest expense, net | 5,075,000 | - | 5,075,000 | |||||||||
Loss before income tax benefit | (6,292,000 | ) | (650,000 | ) | (6,942,000 | ) | ||||||
Income tax benefit | (1,278,000 | ) | (169,000 | ) | (1,447,000 | ) | ||||||
Net loss | $ | (5,014,000 | ) | $ | (481,000 | ) | $ | (5,495,000 | ) | |||
Basic net loss per share | $ | (0.27 | ) | $ | (0.03 | ) | $ | (0.29 | ) | |||
Diluted net loss per share | $ | (0.27 | ) | $ | (0.03 | ) | $ | (0.29 | ) |
Three Months Ended June 30, 2018 | ||||||||||||
Revised Consolidated Statement of Comprehensive Loss Amounts: | As Previously Reported | Adjustment | As Revised | |||||||||
Net loss | $ | (5,014,000 | ) | $ | (481,000 | ) | $ | (5,495,000 | ) | |||
Comprehensive loss | $ | (5,729,000 | ) | $ | (481,000 | ) | $ | (6,210,000 | ) |
June 30, 2018 | ||||||||||||
Restated Consolidated Balance Sheet Amounts: | As Previously Reported | Adjustment | As Revised | |||||||||
ASSETS | ||||||||||||
Contract assets | $ | 16,542,000 | $ | 7,774,000 | $ | 24,316,000 | ||||||
Income tax receivable | 9,416,000 | 345,000 | 9,761,000 | |||||||||
Prepaid expenses and other current assets | 13,148,000 | (2,893,000 | ) | 10,255,000 | ||||||||
Long-term deferred income taxes | 10,343,000 | (3,619,000 | ) | 6,724,000 | ||||||||
Long-term contract assets | 207,792,000 | 14,670,000 | 222,462,000 | |||||||||
Other assets | 6,406,000 | (5,596,000 | ) | 810,000 | ||||||||
TOTAL ASSETS | $ | 549,253,000 | $ | 10,681,000 | $ | 559,934,000 | ||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||
Retained earnings | $ | 63,080,000 | $ | 10,681,000 | $ | 73,761,000 | ||||||
TOTAL SHAREHOLDERS’ EQUITY | $ | 270,738,000 | $ | 10,681,000 | $ | 281,419,000 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 549,253,000 | $ | 10,681,000 | $ | 559,934,000 |
Three Months Ended June 30, 2018 | ||||||||||||
Revised Consolidated Statement of Cash Flow from Operating Activities Amounts: | As Previously Reported | Adjustment | As Revised | |||||||||
Net loss | $ | (5,014,000 | ) | $ | (481,000 | ) | $ | (5,495,000 | ) | |||
Income tax receivable | (1,622,000 | ) | (169,000 | ) | (1,791,000 | ) | ||||||
Prepaid expenses and other current assets | (697,000 | ) | 10,000 | (687,000 | ) | |||||||
Other assets | 941,000 | (992,000 | ) | (51,000 | ) | |||||||
Accounts payable and accrued liabilities | 11,117,000 | (249,000 | ) | 10,868,000 | ||||||||
Contract assets, net | (2,722,000 | ) | 1,881,000 | (841,000 | ) | |||||||
Net cash used in operating activities | $ | (924,000 | ) | $ | - | $ | (924,000 | ) |
3. |
Three Months Ended June 30, 2017 | ||||||||||||
As Revised | Adoption of ASC 606 | As Adjusted | ||||||||||
Net sales | $ | 94,239,000 | $ | 456,000 | $ | 94,695,000 | ||||||
Cost of goods sold | 69,224,000 | (381,000 | ) | 68,843,000 | ||||||||
Gross profit | 25,015,000 | 837,000 | 25,852,000 | |||||||||
Operating expenses: | ||||||||||||
General and administrative | 5,888,000 | - | 5,888,000 | |||||||||
Sales and marketing | 3,394,000 | - | 3,394,000 | |||||||||
Research and development | 1,002,000 | - | 1,002,000 | |||||||||
Total operating expenses | 10,284,000 | - | 10,284,000 | |||||||||
Operating income | 14,731,000 | 837,000 | 15,568,000 | |||||||||
Interest expense, net | 3,314,000 | - | 3,314,000 | |||||||||
Income before income tax expense | 11,417,000 | 837,000 | 12,254,000 | |||||||||
Income tax expense | 4,122,000 | 312,000 | 4,434,000 | |||||||||
Net income | $ | 7,295,000 | $ | 525,000 | $ | 7,820,000 | ||||||
Basic net income per share | $ | 0.39 | $ | 0.03 | $ | 0.42 | ||||||
Diluted net income per share | $ | 0.38 | $ | 0.03 | $ | 0.40 |
Three Months Ended September 30, 2017 | Six Months Ended September 30, 2017 | |||||||||||||||||||||||
As Revised | Adoption of ASC 606 | As Adjusted | As Revised | Adoption of ASC 606 | As Adjusted | |||||||||||||||||||
Net sales | $ | 110,853,000 | $ | (592,000 | ) | $ | 110,261,000 | $ | 205,092,000 | $ | (136,000 | ) | $ | 204,956,000 | ||||||||||
Cost of goods sold | 84,612,000 | (378,000 | ) | 84,234,000 | 153,836,000 | (759,000 | ) | 153,077,000 | ||||||||||||||||
Gross profit | 26,241,000 | (214,000 | ) | 26,027,000 | 51,256,000 | 623,000 | 51,879,000 | |||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||
General and administrative | 8,615,000 | - | 8,615,000 | 14,503,000 | - | 14,503,000 | ||||||||||||||||||
Sales and marketing | 3,457,000 | - | 3,457,000 | 6,851,000 | - | 6,851,000 | ||||||||||||||||||
Research and development | 1,240,000 | - | 1,240,000 | 2,242,000 | - | 2,242,000 | ||||||||||||||||||
Total operating expenses | 13,312,000 | - | 13,312,000 | 23,596,000 | - | 23,596,000 | ||||||||||||||||||
Operating income (loss) | 12,929,000 | (214,000 | ) | 12,715,000 | 27,660,000 | 623,000 | 28,283,000 | |||||||||||||||||
Interest expense, net | 3,522,000 | - | 3,522,000 | 6,836,000 | - | 6,836,000 | ||||||||||||||||||
Income (loss) before income tax expense (benefit) | 9,407,000 | (214,000 | ) | 9,193,000 | 20,824,000 | 623,000 | 21,447,000 | |||||||||||||||||
Income tax expense (benefit) | 3,684,000 | (86,000 | ) | 3,598,000 | 7,806,000 | 226,000 | 8,032,000 | |||||||||||||||||
Net income (loss) | $ | 5,723,000 | $ | (128,000 | ) | $ | 5,595,000 | $ | 13,018,000 | $ | 397,000 | $ | 13,415,000 | |||||||||||
Basic net income (loss) per share | $ | 0.31 | $ | (0.01 | ) | $ | 0.30 | $ | 0.70 | $ | 0.02 | $ | 0.72 | |||||||||||
Diluted net income (loss) per share | $ | 0.30 | $ | (0.01 | ) | $ | 0.29 | $ | 0.67 | $ | 0.02 | $ | 0.69 |
March 31, 2018 | ||||||||||||
As Revised | Adoption of ASC 606 | As Adjusted | ||||||||||
ASSETS | ||||||||||||
Current assets: | ||||||||||||
Cash and cash equivalents | $ | 13,049,000 | $ | - | $ | 13,049,000 | ||||||
Short-term investments | 2,828,000 | - | 2,828,000 | |||||||||
Accounts receivable — net | 15,738,000 | 47,436,000 | 63,174,000 | |||||||||
Inventory— net | 76,275,000 | 84,935,000 | 161,210,000 | |||||||||
Inventory unreturned | 7,508,000 | - | 7,508,000 | |||||||||
Contract assets | - | 23,206,000 | 23,206,000 | |||||||||
Income tax receivable | 7,972,000 | - | 7,972,000 | |||||||||
Prepaid expenses and other current assets | 15,104,000 | (6,496,000 | ) | 8,608,000 | ||||||||
Total current assets | 138,474,000 | 149,081,000 | 287,555,000 | |||||||||
Plant and equipment — net | 28,322,000 | - | 28,322,000 | |||||||||
Long-term core inventory — net | 298,294,000 | (298,294,000 | ) | - | ||||||||
Long-term core inventory deposits | 5,569,000 | (5,569,000 | ) | - | ||||||||
Long-term deferred income taxes | 6,937,000 | (239,000 | ) | 6,698,000 | ||||||||
Long-term contract assets | - | 222,731,000 | 222,731,000 | |||||||||
Goodwill | 2,551,000 | - | 2,551,000 | |||||||||
Intangible assets — net | 3,766,000 | - | 3,766,000 | |||||||||
Other assets | 21,995,000 | (21,191,000 | ) | 804,000 | ||||||||
TOTAL ASSETS | $ | 505,908,000 | $ | 46,519,000 | $ | 552,427,000 | ||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||
Current liabilities: | ||||||||||||
Accounts payable | $ | 73,273,000 | $ | - | $ | 73,273,000 | ||||||
Accrued liabilities | 12,048,000 | - | 12,048,000 | |||||||||
Customer finished goods returns accrual | 17,805,000 | - | 17,805,000 | |||||||||
Accrued core payment | 16,536,000 | (16,536,000 | ) | - | ||||||||
Contract liabilities | - | 32,603,000 | 32,603,000 | |||||||||
Revolving loan | 54,000,000 | - | 54,000,000 | |||||||||
Other current liabilities | 4,471,000 | - | 4,471,000 | |||||||||
Current portion of term loan | 3,068,000 | - | 3,068,000 | |||||||||
Total current liabilities | 181,201,000 | 16,067,000 | 197,268,000 | |||||||||
Term loan, less current portion | 13,913,000 | - | 13,913,000 | |||||||||
Long-term accrued core payment | 18,473,000 | (18,473,000 | ) | - | ||||||||
Long-term deferred income taxes | 226,000 | - | 226,000 | |||||||||
Long-term contract liabilities | - | 48,183,000 | 48,183,000 | |||||||||
Other liabilities | 5,957,000 | - | 5,957,000 | |||||||||
Total liabilities | 219,770,000 | 45,777,000 | 265,547,000 | |||||||||
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; 18,893,102 shares issued and outstanding at March 31, 2018 | 189,000 | - | 189,000 | |||||||||
Additional paid-in capital | 213,609,000 | - | 213,609,000 | |||||||||
Retained earnings | 77,768,000 | 742,000 | 78,510,000 | |||||||||
Accumulated other comprehensive loss | (5,428,000 | ) | - | (5,428,000 | ) | |||||||
Total shareholders’ equity | 286,138,000 | 742,000 | 286,880,000 | |||||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 505,908,000 | $ | 46,519,000 | $ | 552,427,000 |
Three Months Ended June 30, 2017 | ||||||||||||
Cash flows from operating activities: | As Revised | Adoption of ASC 606 | As Adjusted | |||||||||
Net income | $ | 7,295,000 | $ | 525,000 | $ | 7,820,000 | ||||||
Deferred income taxes | (103,000 | ) | 312,000 | 209,000 | ||||||||
Accounts receivable | 16,038,000 | (6,705,000 | ) | 9,333,000 | ||||||||
Inventory | (14,942,000 | ) | (3,552,000 | ) | (18,494,000 | ) | ||||||
Other assets | 1,432,000 | (1,433,000 | ) | (1,000 | ) | |||||||
Long-term core inventory | (2,878,000 | ) | 2,878,000 | - | ||||||||
Contract assets, net | - | 1,726,000 | 1,726,000 | |||||||||
Contract liabilities, net | - | 3,172,000 | 3,172,000 | |||||||||
Accrued core payments | (3,077,000 | ) | 3,077,000 | - | ||||||||
Net cash used in operating activities | (644,000 | ) | - | (644,000 | ) |
Six Months Ended September 30, 2017 | ||||||||||||
Cash flows from operating activities: | As Revised | Adoption of ASC 606 | As Adjusted | |||||||||
Net income | $ | 13,018,000 | $ | 397,000 | $ | 13,415,000 | ||||||
Deferred income taxes | (433,000 | ) | 226,000 | (207,000 | ) | |||||||
Accounts receivable | 14,683,000 | (11,864,000 | ) | 2,819,000 | ||||||||
Inventory | (18,718,000 | ) | (9,834,000 | ) | (28,552,000 | ) | ||||||
Other assets | 2,943,000 | (2,963,000 | ) | (20,000 | ) | |||||||
Long-term core inventory | (5,155,000 | ) | 5,155,000 | - | ||||||||
Contract assets, net | - | 6,882,000 | 6,882,000 | |||||||||
Contract liabilities, net | - | 5,837,000 | 5,837,000 | |||||||||
Accrued core payments | (6,164,000 | ) | 6,164,000 | - | ||||||||
Net cash used in operating activities | $ | (8,148,000 | ) | $ | - | $ | (8,148,000 | ) |
Six Months Ended September 30, | ||||||||
2018 | 2017 | |||||||
Balance at beginning of period | $ | 2,551,000 | $ | 2,551,000 | ||||
Goodwill acquired | - | - | ||||||
Translation adjustment | - | - | ||||||
Impairment | - | - | ||||||
Balance at end of period | $ | 2,551,000 | $ | 2,551,000 |
September 30, 2018 | March 31, 2018 | ||||||||||||||||
Weighted Average Amortization Period | Gross Carrying Value | Accumulated Amortization | Gross Carrying Value | Accumulated Amortization | |||||||||||||
Intangible assets subject to amortization | |||||||||||||||||
Trademarks | 9 years | $ | 885,000 | $ | 392,000 | $ | 885,000 | $ | 316,000 | ||||||||
Customer relationships | 13 years | 5,900,000 | 3,195,000 | 5,900,000 | 2,937,000 | ||||||||||||
Developed technology | 3 years | 299,000 | 117,000 | 301,000 | 67,000 | ||||||||||||
Total | $ | 7,084,000 | $ | 3,704,000 | $ | 7,086,000 | $ | 3,320,000 |
Three Months Ended September 30, | Six Months Ended September 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Amortization expense | $ | 192,000 | $ | 180,000 | $ | 384,000 | $ | 325,000 |
Year Ending March 31, | ||||
2019 - remaining six months | $ | 385,000 | ||
2020 | 710,000 | |||
2021 | 613,000 | |||
2022 | 580,000 | |||
2023 | 580,000 | |||
Thereafter | 512,000 | |||
Total | $ | 3,380,000 |
March 31, 2018 | ||||||||||||
As Previously Reported | Adoption of ASC 606 | As Adjusted | ||||||||||
Accounts receivable — trade | $ | 83,700,000 | $ | - | $ | 83,700,000 | ||||||
Allowance for bad debts | (4,142,000 | ) | - | (4,142,000 | ) | |||||||
Customer allowances earned | (11,370,000 | ) | 11,370,000 | (1) | - | |||||||
Customer payment discrepancies | (1,110,000 | ) | - | (1,110,000 | ) | |||||||
Customer returns RGA issued | (15,274,000 | ) | - | (15,274,000 | ) | |||||||
Customer core returns accruals | (36,066,000 | ) | 36,066,000 | (2) | - | |||||||
Less: total accounts receivable offset accounts | (67,962,000 | ) | 47,436,000 | (20,526,000 | ) | |||||||
Total accounts receivable — net | $ | 15,738,000 | $ | 47,436,000 | $ | 63,174,000 |
September 30, 2018 | March 31, 2018 | September 30, 2019 | March 31, 2019 | |||||||||||||
Accounts receivable — trade | $ | 77,686,000 | $ | 83,700,000 | $ | 86,974,000 | $ | 75,847,000 | ||||||||
Allowance for bad debts | (4,348,000 | ) | (4,142,000 | ) | (4,187,000 | ) | (4,100,000 | ) | ||||||||
Customer payment discrepancies | (827,000 | ) | (1,110,000 | ) | (1,169,000 | ) | (854,000 | ) | ||||||||
Customer returns RGA issued | (16,426,000 | ) | (15,274,000 | ) | (11,704,000 | ) | (14,878,000 | ) | ||||||||
Less: total accounts receivable offset accounts | (21,601,000 | ) | (20,526,000 | ) | (17,060,000 | ) | (19,832,000 | ) | ||||||||
Total accounts receivable — net | $ | 56,085,000 | $ | 63,174,000 | $ | 69,914,000 | $ | 56,015,000 |
Three Months Ended September 30, | Six Months Ended September 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Balance at beginning of period | $ | 14,543,000 | $ | 12,849,000 | $ | 16,646,000 | $ | 14,286,000 | ||||||||
Charged to expense/additions | 30,860,000 | 29,359,000 | 54,753,000 | 51,565,000 | ||||||||||||
Amounts processed | (28,993,000 | ) | (27,409,000 | ) | (54,989,000 | ) | (51,052,000 | ) | ||||||||
Balance at end of period | $ | 16,410,000 | $ | 14,799,000 | $ | 16,410,000 | $ | 14,799,000 |
March 31, 2018 | |||||||||||||
Adoption of | |||||||||||||
As Revised | ASC 606 | As Adjusted | |||||||||||
Inventory | |||||||||||||
Raw materials | $ | 25,805,000 | $ | 51,330,000 | (1) | $ | 77,135,000 | ||||||
Work-in-process | 635,000 | 1,948,000 | (1) | 2,583,000 | |||||||||
Finished goods | 53,973,000 | 34,201,000 | (2) | 88,174,000 | |||||||||
80,413,000 | 87,479,000 | 167,892,000 | |||||||||||
Less allowance for excess and obsolete inventory | (4,138,000 | ) | (2,544,000 | ) | (3) | (6,682,000 | ) | ||||||
Total | $ | 76,275,000 | $ | 84,935,000 | $ | 161,210,000 | |||||||
Inventory unreturned | $ | 7,508,000 | $ | - | $ | 7,508,000 | |||||||
Long-term core inventory | |||||||||||||
Used cores held at the Company’s facilities | $ | 53,278,000 | $ | (53,278,000 | ) | (1) | $ | - | |||||
Used cores expected to be returned by customers | 12,970,000 | (12,970,000 | ) | (4) | - | ||||||||
Remanufactured cores held in finished goods | 34,201,000 | (34,201,000 | ) | (2) | - | ||||||||
Remanufactured cores held at customers’ locations | 200,389,000 | (200,389,000 | ) | (5) | - | ||||||||
300,838,000 | (300,838,000 | ) | - | ||||||||||
Less allowance for excess and obsolete inventory | (2,544,000 | ) | 2,544,000 | (3) | - | ||||||||
Total | $ | 298,294,000 | $ | (298,294,000 | ) | $ | - | ||||||
Long-term core inventory deposits | $ | 5,569,000 | $ | (5,569,000 | ) | (6) | $ | - |
4. |
September 30, 2018 | March 31, 2018 | September 30, 2019 | March 31, 2019 | |||||||||||||
Inventory - net | ||||||||||||||||
Raw materials | $ | 89,919,000 | $ | 77,135,000 | $ | 104,180,000 | $ | 95,757,000 | ||||||||
Work-in-process | 3,811,000 | 2,583,000 | 4,720,000 | 3,502,000 | ||||||||||||
Finished goods | 104,584,000 | 88,174,000 | 154,901,000 | 146,366,000 | ||||||||||||
198,314,000 | 167,892,000 | 263,801,000 | 245,625,000 | |||||||||||||
Less allowance for excess and obsolete inventory | (10,027,000 | ) | (6,682,000 | ) | (13,134,000 | ) | (11,899,000 | ) | ||||||||
Total inventory - net | $ | 188,287,000 | $ | 161,210,000 | $ | 250,667,000 | $ | 233,726,000 | ||||||||
Inventory unreturned | $ | 9,100,000 | $ | 7,508,000 | $ | 8,684,000 | $ | 8,469,000 |
5. | Contract Assets |
September 30, 2018 | March 31, 2018 | September 30, 2019 | March 31, 2019 | |||||||||||||
Short-term contract assets | (As Adjusted) | Short-term contract assets | ||||||||||||||
Cores expected to be returned by customers | $ | 16,775,000 | $ | 15,614,000 | $ | 11,776,000 | $ | 14,671,000 | ||||||||
Upfront payments to customers | 3,441,000 | 3,979,000 | 3,312,000 | 3,101,000 | ||||||||||||
Core premiums paid to customers | 4,056,000 | 3,613,000 | 4,383,000 | 4,411,000 | ||||||||||||
$ | 24,272,000 | $ | 23,206,000 | |||||||||||||
Total short-term contract assets | $ | 19,471,000 | $ | 22,183,000 | ||||||||||||
Long-term contract assets | Long-term contract assets | |||||||||||||||
Remanufactured cores held at customers’ locations | $ | 204,692,000 | $ | 197,067,000 | $ | 203,024,000 | $ | 196,914,000 | ||||||||
Upfront payments to customers | 4,050,000 | 5,492,000 | 1,234,000 | 2,775,000 | ||||||||||||
Core premiums paid to customers | 16,127,000 | 14,603,000 | 14,502,000 | 16,618,000 | ||||||||||||
Long-term core inventory deposits | 5,569,000 | 5,569,000 | 5,569,000 | 5,569,000 | ||||||||||||
$ | 230,438,000 | $ | 222,731,000 | |||||||||||||
Total contract assets | $ | 254,710,000 | $ | 245,937,000 | ||||||||||||
Total long-term contract assets | $ | 224,329,000 | $ | 221,876,000 |
6. | Significant Customer and Other Information |
Three Months Ended September 30, | Six Months Ended September 30, | Three Months Ended September 30, | Six Months Ended September 30, | |||||||||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||||||||||
Net sales | (As Adjusted) | (As Adjusted) | ||||||||||||||||||||||||||||||
Customer A | 39 | % | 47 | % | 38 | % | 44 | % | 41 | % | 39 | % | 40 | % | 38 | % | ||||||||||||||||
Customer B | 26 | % | 26 | % | 24 | % | 26 | % | 20 | % | 26 | % | 21 | % | 24 | % | ||||||||||||||||
Customer C | 20 | % | 13 | % | 22 | % | 15 | % | 23 | % | 20 | % | 22 | % | 22 | % |
September 30, 2018 | March 31, 2018 | September 30, 2019 | March 31, 2019 | |||||||||||||
Accounts receivable - trade | ||||||||||||||||
Customer A | 31 | % | 36 | % | 33 | % | 34 | % | ||||||||
Customer B | 23 | % | 16 | % | 15 | % | 18 | % | ||||||||
Customer C | 12 | % | 22 | % | 23 | % | 16 | % |
Three Months Ended September 30, | Six Months Ended September 30, | |||||||||||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | Three Months Ended September 30, | Six Months Ended September 30, | |||||||||||||||||||||||||||
(As Adjusted) | (As Adjusted) | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||||||||||||
Rotating electrical products | 80 | % | 76 | % | 79 | % | 77 | % | 77 | % | 80 | % | 76 | % | 79 | % | ||||||||||||||||
Wheel hub products | 14 | % | 18 | % | 16 | % | 18 | % | 15 | % | 14 | % | 16 | % | 16 | % | ||||||||||||||||
Brake caliper products | 3 | % | - | % | 2 | % | - | % | ||||||||||||||||||||||||
Brake master cylinders products | 2 | % | 3 | % | 2 | % | 3 | % | 1 | % | 2 | % | 2 | % | 2 | % | ||||||||||||||||
Other products | 4 | % | 3 | % | 3 | % | 2 | % | 4 | % | 4 | % | 4 | % | 3 | % | ||||||||||||||||
100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % |
7. | Debt |
September 30, 2018 | March 31, 2018 | September 30, 2019 | March 31, 2019 | |||||||||||||
Principal amount of term loan | $ | 30,000,000 | $ | 17,188,000 | $ | 26,250,000 | $ | 28,125,000 | ||||||||
Unamortized financing fees | (283,000 | ) | (207,000 | ) | (273,000 | ) | (253,000 | ) | ||||||||
Net carrying amount of term loan | 29,717,000 | 16,981,000 | 25,977,000 | 27,872,000 | ||||||||||||
Less current portion of term loan | (3,685,000 | ) | (3,068,000 | ) | (3,678,000 | ) | (3,685,000 | ) | ||||||||
Long-term portion of term loan | $ | 26,032,000 | $ | 13,913,000 | $ | 22,299,000 | $ | 24,187,000 |
Year Ending March 31, | ||||||||
2019 - remaining six months | 1,875,000 | |||||||
2020 | 3,750,000 | |||||||
2020 - remaining six months | $ | 1,875,000 | ||||||
2021 | 3,750,000 | 3,750,000 | ||||||
2022 | 3,750,000 | 3,750,000 | ||||||
2023 | 3,750,000 | 3,750,000 | ||||||
Thereafter | 13,125,000 | |||||||
2024 | 13,125,000 | |||||||
Total payments | $ | 30,000,000 | $ | 26,250,000 |
8. | Contract Liabilities |
September 30, 2018 | March 31, 2018 | September 30, 2019 | March 31, 2019 | |||||||||||||
Short-term contract liabilities | Short-term contract liabilities | |||||||||||||||
Customer allowances earned | $ | 11,381,000 | $ | 11,370,000 | $ | 10,365,000 | $ | 12,755,000 | ||||||||
Customer core returns accruals | 4,743,000 | 4,697,000 | 3,973,000 | 3,933,000 | ||||||||||||
Customer deposits | 1,377,000 | 2,674,000 | ||||||||||||||
Accrued core payment, net | 15,364,000 | 16,536,000 | 8,349,000 | 11,237,000 | ||||||||||||
$ | 31,488,000 | $ | 32,603,000 | |||||||||||||
Total short-term contract liabilities | $ | 24,064,000 | $ | 30,599,000 | ||||||||||||
Long-term contract liabilities | Long-term contract liabilities | |||||||||||||||
Customer core returns accruals | $ | 34,000,000 | $ | 29,710,000 | $ | 38,841,000 | $ | 25,722,000 | ||||||||
Accrued core payment, net | 18,535,000 | 18,473,000 | 10,486,000 | 15,167,000 | ||||||||||||
$ | 52,535,000 | $ | 48,183,000 | |||||||||||||
Total contract liabilities | $ | 84,023,000 | $ | 80,786,000 | ||||||||||||
Total long-term contract liabilities | $ | 49,327,000 | $ | 40,889,000 |
9. | Leases |
September 30, 2019 | ||||||
Leases | Classification | |||||
Assets: | ||||||
Operating | Operating lease assets | $ | 49,262,000 | |||
Finance | Plant and equipment | 7,079,000 | ||||
Total leased assets | $ | 56,341,000 | ||||
Liabilities: | ||||||
Current | ||||||
Operating | Operating lease liabilities | $ | 4,487,000 | |||
Finance | Other current liabilities | 2,036,000 | ||||
Long-term | ||||||
Operating | Long-term operating lease liabilities | 47,925,000 | ||||
Finance | Other liabilities | 4,149,000 | ||||
Total lease liabilities | $ | 58,597,000 |
Three Months Ended September 30, | Six Months Ended September 30, | |||||||
2019 | 2019 | |||||||
Lease cost | ||||||||
Operating lease cost | $ | 1,987,000 | $ | 3,885,000 | ||||
Short-term lease cost | 295,000 | 698,000 | ||||||
Variable lease cost | 157,000 | 287,000 | ||||||
Finance lease cost: | ||||||||
Amortization of finance lease assets | 372,000 | 730,000 | ||||||
Interest on finance lease liabilities | 73,000 | 141,000 | ||||||
Total lease cost | $ | 2,884,000 | $ | 5,741,000 |
Maturity of lease liabilities | Operating Leases | Finance Leases | Total | |||||||||
2020 - remaining six months | $ | 3,799,000 | $ | 1,172,000 | $ | 4,971,000 | ||||||
2021 | 6,957,000 | 2,074,000 | 9,031,000 | |||||||||
2022 | 6,168,000 | 1,740,000 | 7,908,000 | |||||||||
2023 | 4,968,000 | 1,131,000 | 6,099,000 | |||||||||
2024 | 4,866,000 | 472,000 | 5,338,000 | |||||||||
Thereafter | 47,268,000 | 113,000 | 47,381,000 | |||||||||
Total lease payments | 74,026,000 | 6,702,000 | 80,728,000 | |||||||||
Less amount representing interest | (21,614,000 | ) | (517,000 | ) | (22,131,000 | ) | ||||||
Present value of lease liabilities | $ | 52,412,000 | $ | 6,185,000 | $ | 58,597,000 |
Six Months Ended September 30, 2019 | ||||
Lease term and discount rate | ||||
Weighted-average remaining lease term (years): | ||||
Finance leases | 3.4 | |||
Operating leases | 12.0 | |||
Weighted-average discount rate: | ||||
Finance leases | 4.8 | % | ||
Operating leases | 5.6 | % |
10. | Accounts Receivable Discount Programs |
Six Months Ended September 30, | Six Months Ended September 30, | |||||||||||||||
2018 | 2017 | 2019 | 2018 | |||||||||||||
Receivables discounted | $ | 191,849,000 | $ | 175,209,000 | $ | 205,882,000 | $ | 191,849,000 | ||||||||
Weighted average days | 338 | 341 | 346 | 338 | ||||||||||||
Annualized weighted average discount rate | 4.1 | % | 3.1 | % | 3.6 | % | 4.1 | % | ||||||||
Amount of discount as interest expense | $ | 7,441,000 | $ | 5,090,000 | ||||||||||||
Amount of discount recognized as interest expense | $ | 7,196,000 | $ | 7,441,000 |
11. | Net Income (Loss) Per Share |
Three Months Ended September 30, | Six Months Ended September 30, | Three Months Ended September 30, | Six Months Ended September 30, | |||||||||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||||||||||
(As Adjusted) | �� | (As Adjusted) | ||||||||||||||||||||||||||||||
Net income (loss) | $ | 3,513,000 | $ | 5,595,000 | $ | (1,982,000 | ) | $ | 13,415,000 | $ | 6,189,000 | $ | 3,513,000 | $ | 38,000 | $ | (1,982,000 | ) | ||||||||||||||
Basic shares | 18,878,674 | 18,718,709 | 18,887,214 | 18,687,179 | 18,903,182 | 18,878,674 | 18,862,901 | 18,887,214 | ||||||||||||||||||||||||
Effect of potentially dilutive securities | 440,791 | 638,100 | - | 683,965 | 314,145 | 440,791 | 383,698 | - | ||||||||||||||||||||||||
Diluted shares | 19,319,465 | 19,356,809 | 18,887,214 | 19,371,144 | 19,217,327 | 19,319,465 | 19,246,599 | 18,887,214 | ||||||||||||||||||||||||
Net income (loss) per share: | ||||||||||||||||||||||||||||||||
Basic net income (loss) per share | $ | 0.19 | $ | 0.30 | $ | (0.10 | ) | $ | 0.72 | $ | 0.33 | $ | 0.19 | $ | 0.00 | $ | (0.10 | ) | ||||||||||||||
Diluted net income (loss) per share | $ | 0.18 | $ | 0.29 | $ | (0.10 | ) | $ | 0.69 | $ | 0.32 | $ | 0.18 | $ | 0.00 | $ | (0.10 | ) |
12. | Income Taxes |
13. | Financial Risk Management and Derivatives |
Gain (Loss) Recognized within General and Administrative Expenses | ||||||||||||||||
Derivatives Not Designated as | Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||
Hedging Instruments | 2018 | 2017 | 2018 | 2017 | ||||||||||||
Forward foreign currency exchange contracts | $ | 1,898,000 | $ | (330,000 | ) | $ | (768,000 | ) | $ | 722,000 |
Derivatives Not Designated as Hedging Instruments | Gain (Loss) Recognized within General and Administrative Expenses | |||||||||||||||
Three Months Ended September 30, | Six Months Ended September 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Forward foreign currency exchange contracts | $ | (663,000 | ) | $ | 1,898,000 | $ | (628,000 | ) | $ | (768,000 | ) |
14. | Fair Value Measurements |
September 30, 2018 | March 31, 2018 | September 30, 2019 | March 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements Using Inputs Considered as | Fair Value Measurements Using Inputs Considered as | Fair Value | Fair Value Measurements Using Inputs Considered as | Fair Value | Fair Value Measurements Using Inputs Considered as | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value | Level 1 | Level 2 | Level 3 | Fair Value | Level 1 | Level 2 | Level 3 | Level 1 | Level 2 | Level 3 | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short-term investments | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mutual funds | $ | 3,230,000 | $ | 3,230,000 | - | - | $ | 2,828,000 | $ | 2,828,000 | - | - | $ | 2,192,000 | $ | 2,192,000 | - | - | $ | 3,273,000 | $ | 3,273,000 | - | - | ||||||||||||||||||||||||||||||||||||||||
Prepaid expenses and other current assets | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Forward foreign currency exchange contracts | 411,000 | - | $ | 411,000 | - | 1,179,000 | - | $ | 1,179,000 | - | - | - | - | - | 207,000 | - | $ | 207,000 | - | |||||||||||||||||||||||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued liabilities | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short-term contingent consideration | 2,721,000 | - | - | $ | 2,721,000 | 2,816,000 | - | - | $ | 2,816,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other current liabilities | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred compensation | 3,230,000 | 3,230,000 | - | - | 2,828,000 | 2,828,000 | - | - | 2,192,000 | 2,192,000 | - | - | 3,273,000 | 3,273,000 | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||
Forward foreign currency exchange contracts | 421,000 | - | $ | 421,000 | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other liabilities | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term contingent consideration | 2,130,000 | - | - | 2,130,000 | 1,905,000 | - | - | 1,905,000 |
September 30, 2019 | ||||
Risk free interest rate | 1.61 | % | ||
Counter party rate | 5.61 | % | ||
Expected volatility | 28.00 | % | ||
Weighted average cost of capital | 15.50 | % |
September 30, 2019 | ||||
Risk free interest rate | 1.72 | % | ||
Counter party rate | 4.00 | % | ||
Revenue volatility | 8.00 | % | ||
Revenue discount rate | 5.00 | % | ||
Weighted average cost of capital | 13.90 | % |
Contingent Consideration | ||||||||
Three Months Ended September 30, 2019 | Six Months Ended September 30, 2019 | |||||||
Beginning balance | $ | 4,970,000 | $ | 4,721,000 | ||||
Changes in revaluations of contingent consideration included in earnings | (119,000 | ) | 130,000 | |||||
Ending balance | $ | 4,851,000 | $ | 4,851,000 |
15. | Share-based Payments |
Six Months Ended September 30, | Six Months Ended September 30, | |||||||||||||||
2018 | 2017 | 2019 | 2018 | |||||||||||||
Weighted average risk free interest rate | 2.82 | % | 1.90 | % | 1.77 | % | 2.82 | % | ||||||||
Weighted average expected holding period (years) | 5.94 | 5.82 | 5.70 | 5.94 | ||||||||||||
Weighted average expected volatility | 43.98 | % | 47.36 | % | 42.51 | % | 43.98 | % | ||||||||
Weighted average expected dividend yield | - | - | - | - | ||||||||||||
Weighted average fair value of options granted | $ | 8.71 | $ | 12.69 | $ | 8.28 | $ | 8.71 |
Number of Shares | Weighted Average Exercise Price | Number of Shares | Weighted Average Exercise Price | |||||||||||||
Outstanding at March 31, 2018 | 1,143,298 | $ | 16.97 | |||||||||||||
Outstanding at March 31, 2019 | 1,337,165 | $ | 17.58 | |||||||||||||
Granted | 245,400 | $ | 19.02 | 300,039 | $ | 19.75 | ||||||||||
Exercised | (39,032 | ) | $ | 6.24 | (52,800 | ) | $ | 7.67 | ||||||||
Forfeited | (9,700 | ) | $ | 26.43 | (5,171 | ) | $ | 20.62 | ||||||||
Outstanding at September 30, 2018 | 1,339,966 | $ | 17.59 | |||||||||||||
Outstanding at September 30, 2019 | 1,579,233 | $ | 18.31 |
Number of Shares | Weighted Average Grant Date Fair Value | Number of Shares | Weighted Average Grant Date Fair Value | |||||||||||||
Outstanding at March 31, 2018 | 133,828 | $ | 28.37 | |||||||||||||
Outstanding at March 31, 2019 | 243,134 | $ | 21.75 | |||||||||||||
Granted | 78,400 | $ | 19.00 | 79,851 | $ | 19.93 | ||||||||||
Vested | (45,966 | ) | $ | 28.77 | (133,488 | ) | $ | 21.11 | ||||||||
Forfeited | (1,434 | ) | $ | 28.37 | (1,101 | ) | $ | 21.40 | ||||||||
Outstanding at September 30, 2018 | 164,828 | $ | 23.80 | |||||||||||||
Outstanding at September 30, 2019 | 188,396 | $ | 21.44 |
16. | Accumulated Other Comprehensive Loss |
Three Months Ended September 30, 2018 | Three Months Ended September 30, 2017 | |||||||||||||||||||||||
Unrealized Gain | Foreign Currency | Total | Unrealized Gain (Loss) | Foreign Currency | Total | |||||||||||||||||||
Balance at June 30, 2018 and 2017 | $ | - | $ | (6,889,000 | ) | $ | (6,889,000 | ) | $ | 584,000 | $ | (7,740,000 | ) | $ | (7,156,000 | ) | ||||||||
Other comprehensive income (loss), net of tax | - | (2,000 | ) | (2,000 | ) | 60,000 | 608,000 | 668,000 | ||||||||||||||||
Amounts reclassified from accumulated other comprehensive loss, net of tax | - | - | - | - | - | - | ||||||||||||||||||
Balance at September 30, 2018 and 2017 | $ | - | $ | (6,891,000 | ) | $ | (6,891,000 | ) | $ | 644,000 | $ | (7,132,000 | ) | $ | (6,488,000 | ) |
Three Months Ended September 30, 2019 | Three Months Ended September 30, 2018 | |||||||||||||||||||||||
Unrealized Gain on Short-Term Investments | Foreign Currency Translation | Total | Unrealized Gain on Short-Term Investments | Foreign Currency Translation | Total | |||||||||||||||||||
Balance at June 30, 2019 and 2018 | $ | - | $ | (6,288,000 | ) | $ | (6,288,000 | ) | $ | - | $ | (6,889,000 | ) | $ | (6,889,000 | ) | ||||||||
Other comprehensive loss, net of tax | - | (431,000 | ) | (431,000 | ) | - | (2,000 | ) | (2,000 | ) | ||||||||||||||
Amounts reclassified from accumulated other comprehensive loss, net of tax | - | - | - | - | - | - | ||||||||||||||||||
Balance at September 30, 2019 and 2018 | $ | - | $ | (6,719,000 | ) | $ | (6,719,000 | ) | $ | - | $ | (6,891,000 | ) | $ | (6,891,000 | ) |
Six Months Ended September 30, 2019 | Six Months Ended September 30, 2018 | |||||||||||||||||||||||
Unrealized Gain on Short-Term Investments | Foreign Currency Translation | Total | Unrealized Gain on Short-Term Investments | Foreign Currency Translation | Total | |||||||||||||||||||
Balance at March 31, 2019 and 2018 | $ | - | $ | (6,887,000 | ) | $ | (6,887,000 | ) | $ | 746,000 | $ | (6,174,000 | ) | $ | (5,428,000 | ) | ||||||||
Cumulative-effect adjustment | - | - | - | (746,000 | ) | - | (746,000 | ) | ||||||||||||||||
Balance at April 1, 2019 and 2018 | - | (6,887,000 | ) | (6,887,000 | ) | - | (6,174,000 | ) | (6,174,000 | ) | ||||||||||||||
Other comprehensive income (loss), net of tax | - | 168,000 | 168,000 | - | (717,000 | ) | (717,000 | ) | ||||||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | - | - | - | - | - | - | ||||||||||||||||||
Balance at September 30, 2019 and 2018 | $ | - | $ | (6,719,000 | ) | $ | (6,719,000 | ) | $ | - | $ | (6,891,000 | ) | $ | (6,891,000 | ) |
Six Months Ended September 30, 2018 | Six Months Ended September 30, 2017 | |||||||||||||||||||||||
Unrealized Gain | Foreign Currency Translation | Total | Unrealized Gain | Foreign Currency Translation | Total | |||||||||||||||||||
Balance at March 31, 2018 and 2017 | $ | 746,000 | $ | (6,174,000 | ) | $ | (5,428,000 | ) | $ | 528,000 | $ | (7,969,000 | ) | $ | (7,441,000 | ) | ||||||||
Cumulative-effect adjustment [see Note 2] | (746,000 | ) | - | (746,000 | ) | - | - | - | ||||||||||||||||
Balance at April 1, 2018 and 2017 | $ | - | $ | (6,174,000 | ) | $ | (6,174,000 | ) | $ | 528,000 | $ | (7,969,000 | ) | $ | (7,441,000 | ) | ||||||||
Other comprehensive (loss) income, net of tax | - | (717,000 | ) | (717,000 | ) | 116,000 | 837,000 | 953,000 | ||||||||||||||||
Amounts reclassified from accumulated other comprehensive loss, net of tax | - | - | - | - | - | - | ||||||||||||||||||
Balance at September 30, 2018 and 2017 | $ | - | $ | (6,891,000 | ) | $ | (6,891,000 | ) | $ | 644,000 | $ | (7,132,000 | ) | $ | (6,488,000 | ) |
17. | Commitments and Contingencies |
Three Months Ended September 30, | Six Months Ended September 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Balance at beginning of period | $ | 15,818,000 | $ | 14,543,000 | $ | 19,475,000 | $ | 16,646,000 | ||||||||
Charged to expense/additions | 32,531,000 | 30,860,000 | 55,716,000 | 54,753,000 | ||||||||||||
Amounts processed | (31,774,000 | ) | (28,993,000 | ) | (58,616,000 | ) | (54,989,000 | ) | ||||||||
Balance at end of period | $ | 16,575,000 | $ | 16,410,000 | $ | 16,575,000 | $ | 16,410,000 |
Three Months Ended September 30, | ||||||||||||||||
2018 | 2017 | Three Months Ended September 30, | ||||||||||||||
(As Adjusted) | 2019 | 2018 | ||||||||||||||
Gross profit percentage | 20.1 | % | 23.6 | % | 24.3 | % | 20.1 | % | ||||||||
Cash flow used in operations | $ | (5,485,000 | ) | $ | (7,504,000 | ) | $ | (8,357,000 | ) | $ | (5,485,000 | ) | ||||
Finished goods turnover (annualized) (1) | 3.9 | 3.5 | 2.8 | 3.9 |
(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 finished goods inventory values, |
Three Months Ended September 30, | ||||||||||||||||
2018 | 2017 | Three Months Ended September 30, | ||||||||||||||
(As Adjusted) | 2019 | 2018 | ||||||||||||||
Net sales | $ | 127,939,000 | $ | 110,261,000 | $ | 150,374,000 | $ | 127,939,000 | ||||||||
Cost of goods sold | 102,228,000 | 84,234,000 | 113,801,000 | 102,228,000 | ||||||||||||
Gross profit | 25,711,000 | 26,027,000 | 36,573,000 | 25,711,000 | ||||||||||||
Gross profit percentage | 20.1 | % | 23.6 | % | 24.3 | % | 20.1 | % |
Three Months Ended September 30, | ||||||||||||||||
2018 | 2017 | Three Months Ended September 30, | ||||||||||||||
(As Adjusted) | 2019 | 2018 | ||||||||||||||
General and administrative | $ | 8,997,000 | $ | 8,615,000 | $ | 14,285,000 | $ | 8,997,000 | ||||||||
Sales and marketing | 4,537,000 | 3,457,000 | 5,448,000 | 4,537,000 | ||||||||||||
Research and development | 1,784,000 | 1,240,000 | 2,148,000 | 1,784,000 | ||||||||||||
Percent of net sales | ||||||||||||||||
General and administrative | 7.0 | % | 7.8 | % | 9.5 | % | 7.0 | % | ||||||||
Sales and marketing | 3.5 | % | 3.1 | % | 3.6 | % | 3.5 | % | ||||||||
Research and development | 1.4 | % | 1.1 | % | 1.4 | % | 1.4 | % |
Six Months Ended September 30, | ||||||||||||||||
2018 | 2017 | Six Months Ended September 30, | ||||||||||||||
(As Adjusted) | 2019 | 2018 | ||||||||||||||
Gross profit percentage | 19.2 | % | 25.3 | % | 20.9 | % | 19.2 | % | ||||||||
Cash flow used in operations | $ | (6,409,000 | ) | $ | (8,148,000 | ) | $ | (26,736,000 | ) | $ | (6,409,000 | ) | ||||
Finished goods turnover (annualized) (1) | 3.7 | 3.5 | 2.7 | 3.7 |
(1) | Annualized finished goods turnover for the fiscal period is calculated by multiplying cost of goods sold for the period by 2 and dividing the result by the average between beginning and ending finished goods inventory values, |
Six Months Ended September 30, | ||||||||||||||||
2018 | 2017 | Six Months Ended September 30, | ||||||||||||||
(As Adjusted) | 2019 | 2018 | ||||||||||||||
Net sales | $ | 219,607,000 | $ | 204,956,000 | $ | 259,522,000 | $ | 219,607,000 | ||||||||
Cost of goods sold | 177,544,000 | 153,077,000 | 205,366,000 | 177,544,000 | ||||||||||||
Gross profit | 42,063,000 | 51,879,000 | 54,156,000 | 42,063,000 | ||||||||||||
Gross profit percentage | 19.2 | % | 25.3 | % | 20.9 | % | 19.2 | % |
Six Months Ended September 30, | Six Months Ended September 30, | |||||||||||||||
2018 | 2017 | 2019 | 2018 | |||||||||||||
(As Adjusted) | ||||||||||||||||
General and administrative | $ | 21,088,000 | $ | 14,503,000 | $ | 26,285,000 | $ | 21,088,000 | ||||||||
Sales and marketing | 8,929,000 | 6,851,000 | 10,367,000 | 8,929,000 | ||||||||||||
Research and development | 3,520,000 | 2,242,000 | 4,520,000 | 3,520,000 | ||||||||||||
Percent of net sales | ||||||||||||||||
General and administrative | 9.6 | % | 7.1 | % | 10.1 | % | 9.6 | % | ||||||||
Sales and marketing | 4.1 | % | 3.3 | % | 4.0 | % | 4.1 | % | ||||||||
Research and development | 1.6 | % | 1.1 | % | 1.7 | % | 1.6 | % |
Six Months Ended September 30, | Six Months Ended September 30, | |||||||||||||||
2018 | 2017 | 2019 | 2018 | |||||||||||||
Cash provided by (used in): | ||||||||||||||||
Cash flow provided by (used in): | ||||||||||||||||
Operating activities | $ | (6,409,000 | ) | $ | (8,148,000 | ) | $ | (26,736,000 | ) | $ | (6,409,000 | ) | ||||
Investing activities | (5,481,000 | ) | (7,660,000 | ) | (5,701,000 | ) | (5,481,000 | ) | ||||||||
Financing activities | 5,112,000 | 21,827,000 | 29,059,000 | 5,112,000 | ||||||||||||
Effect of exchange rates on cash and cash equivalents | (96,000 | ) | 42,000 | (78,000 | ) | (96,000 | ) | |||||||||
Net decrease in cash and cash equivalents | $ | (6,874,000 | ) | $ | 6,061,000 | $ | (3,456,000 | ) | $ | (6,874,000 | ) | |||||
Additional selected cash flow data: | ||||||||||||||||
Depreciation and amortization | $ | 3,218,000 | $ | 2,153,000 | $ | 4,619,000 | $ | 3,218,000 | ||||||||
Capital expenditures | 5,259,000 | 2,460,000 | 6,943,000 | 5,259,000 |
Calculation as of September 30, 2018 | Financial covenants required under the Amended Credit Facility | Calculation as of September 30, 2019 | Financial covenants required under the Credit Facility | |||||||||||||
Maximum senior leverage ratio | 1.10 | 3.00 | 2.33 | 3.00 | ||||||||||||
Minimum fixed charge coverage ratio | 1.29 | 1.10 | 1.46 | 1.10 |
Six Months Ended September 30, | Six Months Ended September 30, | |||||||||||||||
2018 | 2017 | 2019 | 2018 | |||||||||||||
Receivables discounted | $ | 191,849,000 | $ | 175,209,000 | $ | 205,882,000 | $ | 191,849,000 | ||||||||
Weighted average days | 338 | 341 | 346 | 338 | ||||||||||||
Annualized weighted average discount rate | 4.1 | % | 3.1 | % | 3.6 | % | 4.1 | % | ||||||||
Amount of discount as interest expense | $ | 7,441,000 | $ | 5,090,000 | ||||||||||||
Amount of discount recognized as interest expense | $ | 7,196,000 | $ | 7,441,000 |
(1) | We did not perform a sufficient review of certain accounting policies and lacked oversight of the compliance with those policies, which resulted in inconsistent application, inadequate analysis and deficient documentation to support the financial statement presentation and disclosures over certain accounts, including inventory. |
(2) | Our lack of sufficient technical accounting resources resulted in inadequate oversight of process level controls of one of our subsidiaries. |
1. | Management is in the process of hiring additional finance and accounting personnel with the requisite experience and skill levels, supplemented by third-party technical accounting resources, sufficient to enable the proper and timely review of accounting analyses and memos in various technical areas. |
2. | Management will continue to formalize the assessment and documentation of the Company’s accounting and financial reporting policies and procedures and enhance controls over the monitoring of compliance with those accounting policies and procedures. |
3. | Management will enhance the accounting and internal control training program provided to staff of new and existing subsidiaries. Management will enhance its internal control processes to continuously monitor the subsidiaries’ compliance with and documentation of the Company’s accounting and financial reporting policies and procedures, including internal control over financial reporting. |
4. | Management has enhanced and will continue to enhance the risk assessment process and design of internal control over financial reporting at its subsidiary. |
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) | ||||||||||||||||||||||||
July 1 - July 31, 2018: | ||||||||||||||||||||||||||||||||
July 1 - July 31, 2019: | ||||||||||||||||||||||||||||||||
Open market and privately negotiated purchases | - | $ | - | - | $ | 8,370,000 | - | $ | - | - | $ | 21,308,000 | ||||||||||||||||||||
August 1 - August 31, 2018: | ||||||||||||||||||||||||||||||||
August 1 - August 31, 2019: | ||||||||||||||||||||||||||||||||
Open market and privately negotiated purchases | 65,143 | $ | 24.68 | 65,143 | 23,762,000 | - | $ | - | - | 21,308,000 | ||||||||||||||||||||||
September 1 - September 30, 2018: | ||||||||||||||||||||||||||||||||
September 1 - September 30, 2019: | ||||||||||||||||||||||||||||||||
Open market and privately negotiated purchases | 98,672 | $ | 24.87 | 98,672 | 21,308,000 | - | $ | - | - | 21,308,000 | ||||||||||||||||||||||
Total | 163,815 | 163,815 | $ | 21,308,000 | 0 | 0 | $ | 21,308,000 |
(1) | As of September 30, |
(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 | 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. | |||
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”). | |||
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. | |||
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. | |||
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 17, 2014. | |||
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. | |||
Amendment to the Amended and Restated By-Laws of the Company | Incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed on February 22, 2017. | |||
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. | |||
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. | |||
2010 Incentive Award Plan | Incorporated by reference to Appendix A to the Proxy Statement on Schedule 14A filed on December 15, 2010. | |||
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. |
Number | Description of Exhibit | Method of Filing | ||
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. | |||
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. | |||
Third Amended and Restated 2010 Incentive Award Plan | Incorporated by reference to Appendix A to the Proxy Statement on Schedule 14A filed on November 20, 2017. | |||
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 | XBRL Instance Document | |||
101.SCM | XBRL Taxonomy Extension Schema Document | |||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
MOTORCAR PARTS OF AMERICA, INC. | ||
Dated: | By: | /s/ David Lee |
David Lee | ||
Chief Financial Officer | ||
Dated: | By: | /s/ Kevin Daly |
Kevin Daly | ||
Chief Accounting Officer |