Motorcar Parts of America Reports Fiscal 2018 Fourth Quarter and Year-End Results

LOS ANGELES, June 14, 2018 (GLOBE NEWSWIRE) -- Motorcar Parts of America, Inc. (NASDAQ:MPAA) today reported record sales for its fiscal 2018 fourth quarter and year ended March 31, 2018.

Net sales for the fiscal 2018 fourth quarter increased 5.9 percent to a record high $121.1 million from $114.4 million for the same period a year earlier.

All results labeled as "adjusted" in this press release are non-GAAP measures as discussed more fully below under the heading "Use of Non-GAAP Measures." 

Adjusted net sales for the fiscal 2018 fourth quarter increased 7.8 percent to a record high $123.8 million from $114.9 million a year earlier. 

Net income for the fiscal 2018 fourth quarter was $9.2 million, or $0.47 per diluted share, compared with $9.8 million, or $0.50 per diluted share, a year ago.  The current quarter net income was impacted by higher customer allowances related to new business, an excess customer freight surcharge allowance, transition expenses in connection with expansion of operations and less proceeds from scrap sales due to lower prices compared with the prior year.

Adjusted net income for the fiscal 2018 fourth quarter was $10.9 million, or $0.56 per diluted share, compared with $11.3 million, or $0.58 per diluted share, a year earlier.  Adjusted net income for the quarter includes the negative impact of a one-time excess customer freight surcharge allowance and less proceeds from scrap sales due to lower prices compared with the prior year.  These items were partially offset by a one-time gain related to customer allowances.  The three items resulted in a combined net negative impact of $0.03 per diluted share.

Gross profit for the fiscal 2018 fourth quarter was $30.3 million compared with $31.6 million a year earlier.  Gross profit as a percentage of net sales for the fiscal 2018 fourth quarter was 25.0 percent compared with 27.6 percent a year earlier.  The current quarter gross profit as a percentage of net sales was impacted by the unusual items noted above.

Adjusted gross profit for the fiscal 2018 fourth quarter was $36.6 million compared with $35.8 million a year ago.  Adjusted gross profit as a percentage of adjusted net sales for the three months was 29.6 percent compared with 31.1 percent a year earlier.  Adjusted gross profit as a percentage of adjusted net sales for the quarter was negatively impacted by a one-time excess customer freight surcharge allowance and less proceeds from scrap sales due to lower prices compared with the prior year.  These items were partially offset by a one-time gain related to customer allowances.  These three items resulted in a combined net negative impact of 0.8 percent to the adjusted gross profit margin.

Net sales for fiscal 2018 increased to a record high $428.1 million from $421.3 million a year earlier.  The company's sales and profit performance for the prior-year period reflects the benefits of recognizing a $9.3 million revenue pick-up due to a change in estimate for stock adjustment returns.

Adjusted net sales for fiscal 2018 increased to a record high $436.5 million from $434.0 million last year.  As noted above, the company's sales and profit performance for the prior-year period reflects the benefits of recognizing a $9.3 million revenue pick-up due to a change in estimate for stock adjustment returns. 

Net income for fiscal 2018 was $16.3 million, or $0.84 per diluted share, compared with $37.6 million, or $1.93 per diluted share, in fiscal 2017.  Net income for fiscal 2018 includes a $4.9 million, or $0.25 per diluted share, non-cash book tax charge and a separate transition tax charge of approximately $530,000, or $0.03 per diluted share, both of which relate to the recently enacted Tax Reform Act, which is further discussed below.

Adjusted net income for fiscal 2018 was $35.6 million, or $1.82 per diluted share, compared with $45.5 million, or $2.35 per diluted share, in fiscal 2017.

Gross profit for fiscal 2018 was $105.9 million compared with $115.0 million a year earlier. Gross profit as a percentage of net sales for fiscal 2018 was 24.7 percent compared with 27.3 percent a year earlier - reflecting the impact of customer allowances and return accruals related to new business, higher returns as a percentage of sales and lower overhead absorption.

Adjusted gross profit for fiscal 2018 was $124.9 million compared with $134.5 million a year ago.  Adjusted gross profit as a percentage of adjusted net sales for the twelve months was 28.6 percent compared with 31.0 percent a year earlier.  Adjusted gross profit as a percentage of adjusted net sales for the twelve-month period was impacted by higher returns as a percentage of adjusted sales and lower overhead absorption.

"We achieved record sales for the fiscal year, despite the impact of widely reported negative industry dynamics," said Selwyn Joffe, chairman, president and chief executive officer. 

He noted that the fiscal year was disproportionately affected by inventory reduction initiatives in the customer base, which appears to be over.  "While consumer demand was weaker than in prior years, the company believes aftermarket car parc fundamentals are trending positively, which should result in improving demand," Joffe added.

SG&A expenses for fiscal 2018 increased as a result of the consolidation of the company's newly acquired diagnostics company, and an increase in customer service and sales-related costs to support the company's growing business. 

Joffe emphasized the outlook for its newly acquired diagnostics company is positive, and that the company is ramping up for growth in both its standard and electric vehicle diagnostic product lines. 

"Despite soft replenishment revenue, which had a negative impact on fiscal year 2018, we improved our overall market share during this period and are pleased with the significant new business commitments we have already received for fiscal year 2019.  This bodes well for the company's future," Joffe added.

"We have expanded our operating capacity with a new state-of-the-art distribution facility to support the company's growth and enhance operational efficiencies.  In addition, as announced last week, we completed a new credit facility with expanded liquidity and flexibility to support our growth. 

We believe our company has reached its next inflection point, and we are excited by the opportunities and our leadership position within the $125 billion automotive aftermarket - including the unique opportunities for both our diagnostics and hard parts product lines," Joffe emphasized.
           
Separately, the company repurchased $4.8 million, or approximately 208,000 of its shares, during the fiscal 2018 fourth quarter.  The company has approximately $8.4 million remaining available to repurchase shares under its $20,000,000 authorized share repurchase program.

FISCAL 2019 GUIDANCE

Motorcar Parts of America expects adjusted net sales for its fiscal year 2019 ending March 31 to be between $465 million and $474 million, representing between 6.5 and 8.5 percent growth year over year.  The company has received at least $40 million in new business commitments in existing product lines on an annualized basis.  This business will commence on a staggered basis, predominantly in the fiscal third and fourth quarters.  Adjusted gross margins on an annualized basis are expected to be between 27.0 and 30.0 percent - primarily reflecting product mix and higher freight costs, although quarters may fluctuate above and below these numbers.

IMPACT OF TAX REFORM ACT

The company has evaluated its net income tax expense as a result of the December 2017 Tax Reform Act which reduces its federal corporate income tax rate to 21 percent from 35 percent, among other factors.  The company estimates its effective tax rate commencing in fiscal 2019 will be reduced to approximately 25 percent.

The company's deferred tax assets were reduced by a non-cash charge of approximately $4.9 million, as explained below.  In addition, transition taxes of $530,000 were recorded as of March 31, 2018, as explained below. 

Deferred income taxes result from temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements, which will result in taxable or deductible amounts in future years.  Deferred tax assets and liabilities are measured using enacted rates expected to apply to taxable income in years in which those temporary differences are expected to be recovered or settled.  Deferred tax assets and liabilities are adjusted through income tax expense as changes in tax laws are enacted. 

Transition taxes are one-time expenses for deemed repatriation of accumulated foreign income.

The company's fiscal 2018 results were negatively impacted by $0.28 per diluted share as a result of the Tax Reform Act.  A prorated federal corporate income tax rate of 31.5% applies for the company's full 2018 fiscal year.  The full impact of the Tax Reform Act will be effective in the fiscal year commencing April 1, 2018.

These tax changes represent provisional amounts based on the company's interpretation of the Tax Reform Act and may change as the company receives additional clarification and implementation guidance. The company will continue to analyze the effects of the Tax Reform Act on the company's financial statements and operations. Any additional impacts from the enactment of the Tax Reform Act will be recorded as they are identified during the measurement period as provided for in accordance with Staff Accounting Bulletin No. 118.

REVENUE RECOGNITION

In May 2014, the Financial Accounting Standard Board issued Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers, codified in Accounting Standards Codification ("ASC") 606, "Revenue Recognition - Revenue from Contracts with Customers", which amends the guidance in the former ASC 605, "Revenue Recognition". The company will adopt the new standard on April 1, 2018 and has elected to utilize the full retrospective transition method, which is not expected to have a material impact on the company's consolidated statements of income.  Additional information will be available in the company's form 10-K filing later today.

Use of Non-GAAP Measures

This press release includes the following non-GAAP measures - adjusted net sales, adjusted net income (loss), adjusted EBITDA, adjusted gross profit and adjusted gross margin, which are not measures of financial performance under GAAP, and should not be considered as alternatives to net sales, net income (loss), EBITDA, income from operations, gross profit or gross profit margin as a measure of financial performance.  The Company believes these non-GAAP measures, when considered together with the corresponding GAAP measures, provide useful information to investors and management regarding financial and business trends relating to the company's results of operations.  However, these non-GAAP measures have significant limitations in that they do not reflect all of the costs associated with the operations of the company's business as determined in accordance with GAAP.  Therefore, investors should consider non-GAAP measures in addition to, and not as a substitute for, or superior to, measures of financial performance in accordance with GAAP.  For a reconciliation of adjusted net sales, adjusted net income (loss), adjusted EBITDA, adjusted gross profit and adjusted gross margin to their corresponding GAAP measures, see the financial tables included in this press release.  Also, refer to our Form 8-K to which this release is attached, and other filings we make with the SEC, for further information regarding these adjustments.

Teleconference and Web Cast

Selwyn Joffe, chairman, president and chief executive officer, and David Lee, chief financial officer, will host an investor conference call today at 10:00 a.m. Pacific time to discuss the company's financial results and operations.

The call will be open to all interested investors either through a live audio Web broadcast at www.motorcarparts.com or live by calling (877)-776-4016 (domestic) or (973)-638-3231 (international).  For those who are not available to listen to the live broadcast, the call will be archived for seven days on Motorcar Parts of America's website www.motorcarparts.com.  A telephone playback of the conference call will also be available from approximately 1:00 p.m. Pacific time on June 14, 2018 through 8:59 p.m. Pacific time on June 21, 2018 by calling (855)-859-2056 (domestic) or (404)-537-3406 (international) and using access code: 8489669.

About Motorcar Parts of America, Inc.

Motorcar Parts of America, Inc. is a remanufacturer, manufacturer and distributor of automotive aftermarket parts -- including alternators, starters, wheel bearing and hub assemblies, brake master cylinders, brake power boosters and turbochargers utilized in imported and domestic passenger vehicles, light trucks and heavy-duty applications.  In addition, the company designs and manufactures test equipment for performance, endurance and production testing of alternators, starters, electric motors, inverters and belt starter generators for both the OE and aftermarket. Motorcar Parts of America's products are sold to automotive retail outlets and the professional repair market throughout the United States and Canada, with facilities located in California, Mexico, Malaysia and China, and administrative offices located in California, Tennessee, Mexico, Singapore, Malaysia and Canada.  Additional information is available at www.motorcarparts.com.

The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for certain forward-looking statements. The statements contained in this press release that are not historical facts are forward-looking statements based on the company's current expectations and beliefs concerning future developments and their potential effects on the company. These forward-looking statements involve significant risks and uncertainties (some of which are beyond the control of the company) and are subject to change based upon various factors.  Reference is also made to the Risk Factors set forth in the company's Form 10-K Annual Report filed with the Securities and Exchange Commission (SEC) in June 2018 and in its Forms 10-Q filed with the SEC for additional risks and uncertainties facing the company. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as the result of new information, future events or otherwise.

 

 

MOTORCAR PARTS OF AMERICA, INC. AND SUBSIDIARIES
Consolidated Statements of Income

  Three Months Ended   Years Ended
  March 31,   March 31,
  2018   2017   2018   2017
  (Unaudited)        
                     
Net sales $ 121,108,000   $ 114,410,000   $ 428,072,000   $ 421,253,000
Cost of goods sold 90,780,000   82,783,000   322,199,000   306,207,000
Gross profit 30,328,000   31,627,000   105,873,000   115,046,000
Operating expenses:              
General and administrative 8,810,000   9,678,000   35,527,000   31,124,000
Sales and marketing 4,131,000   3,551,000   15,030,000   12,126,000
Research and development 1,772,000   1,011,000   5,692,000   3,824,000
Total operating expenses 14,713,000   14,240,000   56,249,000   47,074,000
Operating income 15,615,000   17,387,000   49,624,000   67,972,000
Interest expense, net 4,656,000   3,729,000   15,445,000   13,094,000
Income before income tax expense 10,959,000   13,658,000   34,179,000   54,878,000
Income tax expense 1,764,000   3,846,000   17,863,000   17,305,000
Net income $   9,195,000   $   9,812,000   $   16,316,000   $   37,573,000
Basic net income per share $   0.48   $   0.53   $   0.87   $   2.02
Diluted net income per share $   0.47   $   0.50   $   0.84   $   1.93
               
Weighted average number of shares outstanding:              
Basic 18,977,295   18,672,381   18,854,993   18,608,812
Diluted 19,441,230   19,492,999   19,514,775   19,418,706
               
               
               

MOTORCAR PARTS OF AMERICA, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
March 31,

  2018     2017  
ASSETS          
Current assets:          
Cash and cash equivalents $   13,049,000     $   9,029,000  
Short-term investments 2,828,000     2,140,000  
Accounts receivable — net 15,738,000     26,017,000  
Inventory— net 76,275,000     67,516,000  
Inventory unreturned 7,508,000     7,581,000  
Income tax receivable 7,796,000     1,709,000  
Prepaid expenses and other current assets 11,491,000     8,139,000  
Total current assets 134,685,000     122,131,000  
Plant and equipment — net 28,322,000     18,437,000  
Long-term core inventory — net 301,656,000     262,922,000  
Long-term core inventory deposits 5,569,000     5,569,000  
Long-term deferred income taxes 10,556,000     13,546,000  
Goodwill 2,551,000     2,551,000  
Intangible assets — net 3,766,000     3,993,000  
Other assets 7,392,000     6,990,000  
TOTAL ASSETS $     494,497,000     $      436,139,000  
LIABILITIES AND SHAREHOLDERS'  EQUITY          
Current liabilities:          
Accounts payable $   73,273,000     $   85,960,000  
Accrued liabilities 11,799,000     10,077,000  
Customer finished goods returns accrual 17,805,000     17,667,000  
Accrued core payment 16,536,000     11,714,000  
Revolving loan 54,000,000     11,000,000  
Other current liabilities 4,471,000     3,300,000  
Current portion of term loan 3,068,000     3,064,000  
Total current liabilities 180,952,000     142,782,000  
Term loan, less current portion 13,913,000     16,935,000  
Long-term accrued core payment 18,473,000     12,349,000  
Long-term deferred income taxes 226,000     180,000  
Other liabilities 5,957,000     15,212,000  
Total liabilities 219,521,000     187,458,000  
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 and 18,648,854
shares issued and outstanding at March 31, 2018 and 2017, respectively
189,000     186,000  
Additional paid-in capital 213,609,000     205,646,000  
Retained earnings 66,606,000     50,290,000  
Accumulated other comprehensive loss (5,428,000 )   (7,441,000 )
Total shareholders' equity 274,976,000       248,681,000  
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $   494,497,000     $   436,139,000  
           

Reconciliation of Non-GAAP Financial Measures

To supplement the consolidated financial statements presented in accordance with U.S. generally accepted accounting principles ("GAAP"), the Company has included the following non-GAAP adjusted financial measures in this press release and in the webcast to discuss the Company's financial results for the three and twelve months ended March 31, 2018 and 2017. Each of these non-GAAP adjusted financial measures is adjusted from results based on GAAP to exclude certain expenses and gains.  Among other things, the Company uses such non-GAAP adjusted financial measures in addition to and in conjunction with corresponding GAAP measures to help analyze the performance of its business.

These non-GAAP adjusted financial measures reflect an additional way of viewing aspects of the Company's operations that, when viewed with the GAAP results and the reconciliations to corresponding GAAP financial measures, provide a more complete understanding of the Company's results of operations and the factors and trends affecting the Company's business. However, these non-GAAP adjusted financial measures should be considered as a supplement to, and not as a substitute for, or superior to, the corresponding measures calculated in accordance with GAAP.

Income statement information for the three and twelve months ended March 31, 2018 and 2017 are as follows:

Reconciliation of Non-GAAP Financial Measures         Exhibit 1
               
  Three Months Ended March 31,
    Twelve Months Ended March 31,
  2018     2017     2018     2017  
GAAP Results:                      
Net sales $   121,108,000       $   114,410,000     $   428,072,000     $   421,253,000  
Net income 9,195,000     9,812,000     16,316,000     37,573,000  
Diluted income per share (EPS) 0.47     0.50     0.84     1.93  
Gross margin 25.0 %   27.6 %   24.7 %   27.3 %
Non-GAAP Adjusted Results:                      
Non-GAAP adjusted net sales $   123,829,000     $   114,922,000     $   436,531,000     $   433,980,000  
Non-GAAP adjusted net income 10,899,000     11,286,000     35,607,000     45,546,000  
Non-GAAP adjusted diluted earnings per share (EPS) 0.56     0.58     1.82     2.35  
Non-GAAP adjusted gross margin 29.6 %   31.1 %   28.6 %   31.0 %
Non-GAAP adjusted EBITDA $   22,740,000     $   23,227,000     $   74,926,000     $   91,474,000  

Note: Results for the twelve months ended March 31, 2017 include revenue due to the change in estimate for anticipated stock adjustment returns of $9,261,000 (which had a $4,066,000 gross profit and EBITDA impact, $2,551,000 net income impact and $0.13 earnings per diluted share impact).  The change in estimate also had a 0.4% gross margin impact for the twelve months ended March 31, 2017.  

Reconciliation of Non-GAAP Financial Measures                      Exhibit 2
       
  Three Months Ended March 31,   Twelve Months Ended March 31,
  2018     2017   2018     2017
GAAP net sales $   121,108,000   $   114,410,000   $   428,072,000   $   421,253,000
Adjustments:              
Net sales              
Initial return and stock adjustment accruals related to new business 394,000   -   2,890,000   3,168,000
Customer allowances related to new business 2,327,000   512,000   5,569,000   9,559,000
Adjusted net sales $   123,829,000   $   114,922,000   $   436,531,000   $   433,980,000
               
               
   
Reconciliation of Non-GAAP Financial Measures  Exhibit 3
 
  Three Months Ended March 31, 
  2018
  2017
  $   Per Diluted
Share
  $   Per Diluted
Share
GAAP net income $   9,195,000     $   0.47     $   9,812,000     $   0.50  
Adjustments:                      
Net sales                      
Initial return and stock adjustment accruals related to new business… 394,000     $   0.02     -     $  -  
Customer allowances related to new business 2,327,000     $   0.12     512,000     $   0.03  
Cost of goods sold                      
New product line start-up and ramp-up costs, and transition expenses 1,028,000     $   0.05     1,317,000     $   0.07  
Lower of cost or net realizable value revaluation - cores on customers' shelves 2,828,000     $   0.15     2,300,000     $   0.12  
Cost of customer allowances and stock adjustment accruals related to new business (287,000 )   $   (0.01 )   -     $ -  
Operating expenses                      
Legal, severance, acquisition, financing, transition and other costs 355,000     $   0.02     916,000     $   0.05  
Share-based compensation expenses 1,108,000     $   0.06     829,000       $   0.04  
Mark-to-market losses (gains) (1,814,000 )     $   (0.09 )     (1,030,000 )   $   (0.05 )
Tax effected (a) (2,793,000 )   $   (0.14 )   (3,370,000 )   $   (0.17 )
Tax charge for revaluation of deferred tax assets and liabilities (1,427,000 )   $   (0.07 )   -     $ -  
Transition tax on deemed repatriation of accumulated foreign income (15,000 )   $   (0.00 )   -     $   -  
Adjusted net income $ 10,899,000     $   0.56     $ 11,286,000     $   0.58  

(a) Adjusted net income is calculated by applying an income tax rate of 35.5% for the three months ended March 31, 2018 and 39.0% for the three months ended March 31, 2017; this rate may differ from the period's actual income tax rate

 

     
     
Reconciliation of Non-GAAP Financial Measures                Exhibit 4
 
   Twelve Months Ended March 31, 
  2018
    2017
  $
  Per Diluted
Share

  $
    Per Diluted
Share

GAAP net income $ 16,316,000     $   0.84     $ 37,573,000     $   1.93  
Adjustments:                      
Net sales                        
Initial return and stock adjustment accruals related to new business 2,890,000     $   0.15     3,168,000     $   0.16  
Customer allowances related to new business 5,569,000     $   0.29     9,559,000     $   0.49  
Cost of goods sold                      
New product line start-up and ramp-up costs, and transition expenses 1,831,000     $   0.09     1,457,000     $   0.08  
Lower of cost or net realizable value revaluation - cores on customers' shelves and inventory step-up amortization 9,360,000     $   0.48     5,788,000     $   0.30  
Cost of customer allowances and stock adjustment accruals related to new business (649,000 )   $   (0.03 )   (568,000 )   $   (0.03 )
Operating expenses                      
Legal, severance, acquisition, financing, transition and other costs 1,092,000     $   0.06     1,623,000     $   0.08  
Share-based compensation expenses 3,766,000     $   0.19     3,384,000     $   0.17  
Mark-to-market losses (gains) (3,065,000 )   $   (0.16 )   (4,623,000 )   $   (0.24 )
Interest                      
Write-off of debt issuance costs 231,000     $   0.01     -     $ -  
Tax effected (a) (7,127,000 )   $   (0.37 )   (11,815,000 )   $   (0.61 )
Tax charge for revaluation of deferred tax assets and liabilities 4,863,000     $   0.25     -     $ -  
Transition tax on deemed repatriation of accumulated foreign income 530,000     $   0.03     -     $ -  
Adjusted net income $ 35,607,000     $   1.82     $ 45,546,000     $   2.35  

(a) Adjusted net income is calculated by applying an income tax rate of 35.5% for the twelve months ended March 31, 2018 and 39.0% for the twelve months ended March 31, 2017; this rate may differ from the period's actual income tax rate

   
   
Reconciliation of Non-GAAP Financial Measures  Exhibit 5
 
   Three Months Ended March 31,
  2018
  2017
               
   $
     Gross Margin    $      Gross Margin
GAAP gross profit $   30,328,000     25.0%   $   31,627,000   27.6%
Adjustments:                
Net sales                
Initial return and stock adjustment accruals related to new business 394,000         -    
Customer allowances related to new business 2,327,000         512,000    
Cost of goods sold                
New product line start-up and ramp-up costs, and transition expenses 1,028,000         1,317,000    
Lower of cost or net realizable value revaluation - cores on customers' shelves 2,828,000         2,300,000    
Cost of customer allowances and stock adjustment accruals related to new business (287,000 )       -    
Total adjustments 6,290,000     4.6%   4,129,000   3.5%
Adjusted gross profit $   36,618,000     29.6%   $   35,756,000   31.1%
                 

                                                                             

     
     
Reconciliation of Non-GAAP Financial Measures      Exhibit 6
 
   Twelve Months Ended March 31,
  2018
  2017
                 
  $
    Gross Margin     $       Gross Margin
GAAP gross profit $ 105,873,000     24.7%   $ 115,046,000     27.3%
Adjustments:                  
Net sales                  
Initial return and stock adjustment accruals related to new business 2,890,000         3,168,000      
Customer allowances related to new business 5,569,000         9,559,000      
Cost of goods sold                  
New product line start-up and ramp-up costs, and transition expenses 1,831,000         1,457,000      
Lower of cost or net realizable value revaluation - cores on customers' shelves and inventory step-up amortization 9,360,000         5,788,000      
Cost of customer allowances and stock adjustment accruals related to new business (649,000 )       (568,000 )    
Total adjustments 19,001,000     3.9%   19,404,000     3.7%
Adjusted gross profit $ 124,874,000     28.6%   $ 134,450,000     31.0%
                   
                   

                                                                              

       
Reconciliation of Non-GAAP Financial Measures      Exhibit 7
       
  Three Months Ended March 31,
  Twelve Months Ended March 31,
  2018
    2017
    2018
    2017
GAAP net income $   9,195,000     $   9,812,000     $   16,316,000     $   37,573,000  
Interest expense, net 4,656,000     3,729,000     15,445,000     13,094,000  
Income tax expense 1,764,000     3,846,000     17,863,000     17,305,000  
Depreciation and amortization 1,186,000     996,000     4,508,000     3,714,000  
EBITDA $   16,801,000     $   18,383,000     $   54,132,000     $   71,686,000  
                       
Adjustments:                      
Net sales                      
Initial return and stock adjustment accruals related to new business 394,000     -     2,890,000     3,168,000  
Customer allowances related to new business 2,327,000     512,000     5,569,000     9,559,000  
Cost of goods sold                      
New product line start-up and ramp-up costs, and transition expenses 1,028,000     1,317,000     1,831,000     1,457,000  
Lower of cost or net realizable value revaluation - cores on customers' shelves and inventory step-up amortization 2,828,000     2,300,000     9,360,000     5,788,000  
Cost of customer allowances and stock adjustment accruals related to new business (287,000 )   -     (649,000 )   (568,000 )
Operating expenses                      
Legal, severance, acquisition, financing, transition and other costs 355,000     916,000     1,092,000     1,623,000  
Share-based compensation expenses 1,108,000     829,000     3,766,000     3,384,000  
Mark-to-market losses (gains) (1,814,000 )   (1,030,000 )   (3,065,000 )   (4,623,000 )
Adjusted EBITDA $   22,740,000     $   23,227,000     $   74,926,000     $   91,474,000  
                       

CONTACT:           
Gary S. Maier
(310) 471-1288

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