UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 9, 2016

Motorcar Parts of America, Inc.

(Exact name of registrant as specified in its charter)

New York		001-33861		11-2153962
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

2929 California Street, Torrance, CA		90503
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (310) 212-7910

N/A

(Former name, former address and former fiscal year, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o	Soliciting material pursuant to Rule l4a-12 under the Exchange Act (17 CFR 240.l4a-12)

o	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02.

Results of Operations and Financial Condition

On November 9, 2016, Motorcar Parts of America, Inc. (the “Company”) issued a press release announcing its earnings for the fiscal quarter ended September 30, 2016 which is being furnished as Exhibit 99.1. The information contained herein and in the accompanying exhibit shall not be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference to such filing. The information in this report, including the exhibit hereto, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended.

The attached exhibit includes non-GAAP Adjusted net sales, non-GAAP adjusted net income (loss), non-GAAP adjusted EBITDA, non-GAAP adjusted gross profit and non-GAAP adjusted gross margin. The Company believes that these supplemental non-GAAP financial measures, when presented together with the corresponding GAAP financial measures, provide useful information to investors and management regarding financial and business trends relating to its results of operations. However, non-GAAP financial measures have certain 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 financial measures in addition to, and not as a substitute for, or as superior to, measures of financial performance prepared in accordance with GAAP.

The Company makes adjustments to the following items to calculate its non-GAAP financial measures:

Initial return and stock adjustment accruals related to new business. In connection with new business, the Company may establish initial return and stock adjustment accruals to account for the anticipated increased levels of business activity. The Company excluded these initial up-front accruals from net sales because they do not reflect the Company’s operations on an ongoing basis and excluding such accruals enables period-over-period comparability.

Customer allowances related to new business. In connection with new business, the Company may purchase cores from customers, may purchase the customer’s prior supplier’s inventory, or may provide certain customer allowances. The allowances are granted on a negotiated basis, and the Company excluded these allowances from net sales because they do not reflect ongoing product pricing or net sales and excluding such allowances enables period-over-period comparability.

New product line start-up costs. These are start-up costs incurred prior to recognizing sales for the launch of new product lines. The Company excluded start-up costs because they do not reflect the Company’s operations on an ongoing basis and excluding such costs enables period-over-period comparability.

Lower of cost or market revaluation - cores on customers' shelves and inventory step-up amortization. On a quarterly basis, the Company revalues long-term core inventory based on lower of cost or market in accordance with the Company’s accounting policies. The impact of this revaluation is reflected in cost of goods sold. The Company excluded the lower of cost or market revaluation for cores on customers’ shelves because the core inventory on the customers’ shelves is not consumed or realized in cash during the Company’s normal operating cycle. Additionally, amortization of inventory step-up relates to an acquisition and is excluded because it is not ongoing. Neither is used by management to assess the profitability of its business operations.

Cost of customer allowances and stock adjustment accruals related to new business. As described above for the adjustments to net sales, the Company also adds back the cost of customer allowances related to inventory purchases and stock adjustment accruals to cost of goods sold because they do not reflect the Company’s operations on an ongoing basis and excluding such costs enables period-over-period comparability.

Legal, severance, acquisition, financing, transition and other costs. The Company has incurred significant legal costs related to discontinued subsidiaries and a settlement payment related to a claim by an investment bank. Additionally, the Company has incurred severance, acquisition, financing, transition and other costs that are not related to current operations. The Company excluded these costs to enable period-over-period comparability.

Accrual made in connection with the settlement of litigation, net of insurance recoveries, related to discontinued subsidiaries. The Company made an accrual in connection with the settlement of litigation related to discontinued subsidiaries. The Company believes excluding this accrual, net of insurance recoveries, enables period-over-period comparability.

Share-based compensation expenses. These expenses primarily consist of the cost to provide employee restricted stock and restricted stock units, and employee stock options. The Company excluded share-based compensation expense because it is not used by management to assess the profitability of its business operations.

Mark-to-market losses (gains). The Company excluded mark-to-market gains and losses because they are unrealized and are not reflective of actual current cash flows and operating results.

Write-off of prior deferred loan fees. The Company excluded the write-off of prior deferred loan fees because they are related to the Company’s prior term loan, not the Company’s ongoing business operations or financing arrangements.

Item 9.01.

Financial Statements and Exhibits.

The following exhibit is furnished with this Current Report pursuant to Item 2.02:

(d) Exhibits

Exhibit No.		Description
99.1		Press Release, dated November 9, 2016

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	MOTORCAR PARTS OF AMERICA, INC.

Date: November 9, 2016	/s/ Michael M. Umansky
	Michael M. Umansky
	Vice President and General Counsel

NEWS RELEASE

CONTACT:

Gary S. Maier

(310) 471-1288

MOTORCAR PARTS OF AMERICA REPORTS RECORD FISCAL 2017

SECOND QUARTER RESULTS

-- Product Line Expansion Enhances Growth Opportunities --

LOS ANGELES, CA – November 9, 2016 – Motorcar Parts of America, Inc. (Nasdaq: MPAA) today reported results for its fiscal 2017 second quarter -- reflecting record profitability on both a reported and adjusted basis.

Net sales for the fiscal 2017 second quarter were $108.8 million compared with $91.7 million for the same period a year earlier. The company’s sales performance for the fiscal 2017 second quarter reflects continued strength of its rotating electrical and wheel hub business, as well as contributions from its other product lines -- including the company’s emerging brake power boosters, which commenced in August. Sales were partially offset by certain customer allowances and return accruals related to new business.

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 2017 second quarter were $112.4 million compared with $101.7 million a year earlier.

Net income for the fiscal 2017 second quarter was $9.1 million, or $0.47 per diluted share, compared with a net loss of $1.4 million, or $0.08 per share, a year ago.

Adjusted net income for the fiscal 2017 second quarter was $12.4 million, or $0.64 per diluted share, compared with $11.8 million, or $0.62 per diluted share, in the same period a year earlier.

Gross profit for the fiscal 2017 second quarter was $30.7 million compared with $21.8 million a year earlier. Gross profit as a percentage of net sales for the fiscal 2017 second quarter was 28.2 percent compared with 23.8 percent a year earlier, primarily due to customer allowances related to new business.

Adjusted gross profit for the fiscal 2017 second quarter was $34.5 million compared with $31.4 million a year ago. Adjusted gross profit as a percentage of adjusted net sales for the three months was 30.7 percent compared with 30.9 percent a year earlier.

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Motorcar Parts of America, Inc.

2-2-2

Net sales for the fiscal 2017 six-month period were $194.2 million compared with $177.5 million a year earlier.

Adjusted net sales for the six-month period were $206.2 million compared with $188.4 million last year.

Net income for the six-month period was $16.7 million, or $0.86 per diluted share, compared with $518,000, or $0.03 per diluted share, in fiscal 2016.

Adjusted net income for the first half of fiscal 2017 was $22.5 million, or $1.16 per diluted share, compared with $20.1 million, or $1.07 per diluted share, in fiscal 2016.

Gross profit for the fiscal 2017 six-month period was $51.0 million compared with $47.8 million a year earlier. Gross profit as a percentage of net sales for the fiscal 2017 first half was 26.3 percent compared with 26.9 percent a year earlier, primarily due to customer allowances related to new business.

Adjusted gross profit for the fiscal 2017 the six-month period was $64.8 million compared with $58.2 million a year ago. Adjusted gross profit as a percentage of adjusted net sales for the six months was 31.4 percent compared with 30.9 percent a year earlier.

“As we commence the second half of fiscal 2017, we are well-positioned within the aftermarket industry. We anticipate solid growth in all of our product lines, and we are encouraged by the numerous additional opportunities we are seeing,” said Selwyn Joffe, chairman, president and chief executive officer of Motorcar Parts of America.

“Results for the quarter reflect continued strength of our business – supported by an aging vehicle population, increased miles driven and related factors, all of which continue to contribute to overall growth in the aftermarket industry. As always, we thank our entire team for their day-in and day-out commitment to excellence and our company,” Joffe said

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.

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Motorcar Parts of America, Inc.

3-3-3

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 this morning 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 November 9, 2016 through 8:59 p.m. Pacific time on Wednesday, November 16, 2016 by calling (855)-859-2056 (domestic) or (404)-537-3406 (international) and using access code: 5599020.

About Motorcar Parts of America, Inc.

Motorcar Parts of America is a remanufacturer, manufacturer and distributor of automotive aftermarket parts -- including alternators, starters, wheel hub assembly products, brake master cylinders, brake power boosters and turbochargers utilized in imported and domestic passenger vehicles, light trucks and heavy duty applications. 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, Virginia, Mexico, Singapore, Malaysia and Toronto. 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 2016 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.

# # #

(Financial tables follow)

MOTORCAR PARTS OF AMERICA, INC. AND SUBSIDIARIES

Consolidated Statements of Income

(Unaudited)

	Three Months Ended					Six Months Ended
	September 30,					September 30,
	2016		2015			2016		2015

Net sales	$	108,836,000	$	91,670,000		$	194,248,000	$	177,505,000
Cost of goods sold		78,178,000		69,850,000			143,199,000		129,694,000
Gross profit		30,658,000		21,820,000			51,049,000		47,811,000
Operating expenses:
General and administrative		9,869,000		18,219,000			13,494,000		29,579,000
Sales and marketing		2,707,000		2,632,000			5,341,000		4,912,000
Research and development		905,000		646,000			1,774,000		1,382,000
Total operating expenses		13,481,000		21,497,000			20,609,000		35,873,000
Operating income		17,177,000		323,000			30,440,000		11,938,000
Interest expense, net		3,189,000		2,613,000			6,008,000		11,050,000
Income (loss) before income tax expense (benefit)		13,988,000		(2,290,000	)		24,432,000		888,000
Income tax expense (benefit)		4,845,000		(898,000	)		7,781,000		370,000

Net income (loss)	$	9,143,000	$	(1,392,000	)	$	16,651,000	$	518,000

Basic net income (loss) per share	$	0.49	$	(0.08	)	$	0.90	$	0.03

Diluted net income (loss) per share	$	0.47	$	(0.08	)	$	0.86	$	0.03

Weighted average number of shares outstanding:
Basic		18,641,324		18,215,783			18,544,118		18,109,912

Diluted		19,429,390		18,215,783			19,384,668		18,887,153

MOTORCAR PARTS OF AMERICA, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

	September 30, 2016			March 31, 2016
ASSETS	(Unaudited)
Current assets:
Cash and cash equivalents	$	5,452,000		$	21,897,000
Short-term investments		2,233,000			1,813,000
Accounts receivable — net		16,112,000			8,548,000
Inventory— net		72,164,000			58,060,000
Inventory unreturned		10,228,000			10,520,000
Deferred income taxes		34,414,000			33,347,000
Prepaid expenses and other current assets		7,796,000			5,900,000
Total current assets		148,399,000			140,085,000
Plant and equipment — net		17,227,000			16,099,000
Long-term core inventory — net		251,048,000			241,100,000
Long-term core inventory deposits		5,569,000			5,569,000
Long-term deferred income taxes		457,000			236,000
Goodwill		2,476,000			2,053,000
Intangible assets — net		4,316,000			4,573,000
Other assets		8,176,000			3,657,000
TOTAL ASSETS	$	437,668,000		$	413,372,000
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	74,845,000		$	72,152,000
Accrued liabilities		6,938,000			9,101,000
Customer finished goods returns accrual		19,761,000			26,376,000
Accrued core payment		11,174,000			8,989,000
Revolving loan		19,000,000			7,000,000
Other current liabilities		9,757,000			4,698,000
Current portion of term loan		3,064,000			3,067,000
Total current liabilities		144,539,000			131,383,000
Term loan, less current portion		18,447,000			19,980,000
Long-term accrued core payment		17,996,000			17,550,000
Long-term deferred income taxes		13,675,000			14,315,000
Other liabilities		14,187,000			19,336,000
Total liabilities		208,844,000			202,564,000
Commitments and contingencies
Shareholders' equity:
Preferred stock; par value $.01 per share, 5,000,000 shares authorized; none issued		-			-
Series A junior participating preferred stock; par value $.01 per share, 20,000 shares authorized; none issued		-			-
Common stock; par value $.01 per share, 50,000,000 shares authorized;
18,665,196 and 18,531,751 shares issued and outstanding at September 30, 2016 and March 31, 2016, respectively		187,000			185,000
Additional paid-in capital		205,375,000			203,650,000
Retained earnings		29,368,000			11,825,000
Accumulated other comprehensive loss		(6,106,000	)		(4,852,000	)
Total shareholders' equity		228,824,000			210,808,000
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	437,668,000		$	413,372,000

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 six months ended September 30, 2016 and 2015. 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 six months ended September 30, 2016 and 2015 are as follows:

Reconciliation of Non-GAAP Financial Measures

Exhibit 1

	Three Months Ended September 30,						Six Months Ended September 30,
	2016			2015			2016			2015
GAAP Results:
Net sales	$	108,836,000		$	91,670,000		$	194,248,000		$	177,505,000
Net income (loss)		9,143,000			(1,392,000	)		16,651,000			518,000
Diluted income (loss) per share (EPS)		0.47			(0.08	)		0.86			0.03
Gross margin		28.2	%		23.8	%		26.3	%		26.9	%
Non-GAAP Adjusted Results:
Non-GAAP adjusted net sales	$	112,383,000		$	101,745,000		$	206,205,000		$	188,368,000
Non-GAAP adjusted net income		12,426,000			11,790,000			22,516,000			20,144,000
Non-GAAP adjusted diluted earnings per share (EPS)		0.64			0.62			1.16			1.07
Non-GAAP adjusted gross margin		30.7	%		30.9	%		31.4	%		30.9	%
Non-GAAP adjusted EBITDA		24,470,000			22,681,000			44,689,000			40,396,000

Reconciliation of Non-GAAP Financial Measures

Exhibit 2

	Three Months Ended September 30,				Six Months Ended September 30,
	2016		2015		2016		2015
GAAP net sales	$	108,836,000	$	91,670,000	$	194,248,000	$	177,505,000
Adjustments:
Net sales
Initial return and stock adjustment accruals related to new business		1,315,000		-		3,168,000		-
Customer allowances related to new business		2,232,000		10,075,000		8,789,000		10,863,000
Adjusted net sales	$	112,383,000	$	101,745,000	$	206,205,000	$	188,368,000

Reconciliation of Non-GAAP Financial Measures

Exhibit 3

	Three Months Ended September 30,
	2016						2015
	$			Per Diluted Share			$			Per Diluted Share
GAAP net income (loss)	$	9,143,000		$	0.47		$	(1,392,000	)	$	(0.08	)
Adjustments:
Net sales
Initial return and stock adjustment accruals related to new business		1,315,000		$	0.07			-		$	-
Customer allowances related to new business		2,232,000		$	0.11			10,075,000		$	0.53
Cost of goods sold
New product line start-up costs		16,000		$	0.001			-		$	-
Lower of cost or market revaluation - cores on customers' shelves and inventory step-up amortization		475,000		$	0.02			326,000		$	0.02
Cost of customer allowances and stock adjustment accruals related to new business		(213,000	)	$	(0.01	)		(809,000	)	$	(0.04	)
Operating expenses
Legal, severance, acquisition, financing, transition and other costs		219,000		$	0.01			1,112,000		$	0.06
Accrual made in connection with the settlement of litigation, net of insurance recoveries, related to discontinued subsidiaries		-		$	-			9,250,000		$	0.49
Share-based compensation expenses		1,008,000		$	0.05			517,000		$	0.03
Mark-to-market losses (gains)		1,331,000		$	0.07			1,147,000		$	0.06
Tax effected at 39% tax rate (a)		(3,100,000	)	$	(0.16	)		(8,436,000	)	$	(0.45	)
Adjusted net income	$	12,426,000		$	0.64		$	11,790,000		$	0.62

(a) Tax effect at 39% of the income before income tax expense (reflecting the adjustments)

Reconciliation of Non-GAAP Financial Measures

Exhibit 4

	Six Months Ended September 30,
	2016						2015
	$			Per Diluted Share			$			Per Diluted Share
GAAP net income	$	16,651,000		$	0.86		$	518,000		$	0.03
Adjustments:
Net sales
Initial return and stock adjustment accruals related to new business		3,168,000		$	0.16			-		$	-
Customer allowances related to new business		8,789,000		$	0.45			10,863,000		$	0.58
Cost of goods sold
New product line start-up costs		140,000		$	0.01			-		$	-
Lower of cost or market revaluation - cores on customers' shelves and inventory step-up amortization		2,193,000		$	0.11			326,000		$	0.02
Cost of customer allowances and stock adjustment accruals related to new business		(568,000	)	$	(0.03	)		(809,000	)	$	(0.04	)
Operating expenses
Legal, severance, acquisition, financing, transition and other costs		615,000		$	0.03			4,253,000		$	0.23
Accrual made in connection with the settlement of litigation, net of insurance recoveries, related to discontinued subsidiaries		-		$	-			9,250,000		$	0.49
Share-based compensation expenses		1,737,000		$	0.09			1,033,000		$	0.05
Mark-to-market losses (gains)		(3,595,000	)	$	(0.19	)		2,111,000		$	0.11
Interest
Write-off of prior deferred loan fees		-		$	-			5,108,000		$	0.27
Tax effected at 39% tax rate (a)		(6,614,000	)	$	(0.34	)		(12,509,000	)	$	(0.66	)
Adjusted net income	$	22,516,000		$	1.16		$	20,144,000		$	1.07

(a) Tax effect at 39% of the income before income tax expense (reflecting the adjustments)

Reconciliation of Non-GAAP Financial Measures

Exhibit 5

	Three Months Ended September 30,
	2016						2015
	$			Gross Margin			$			Gross Margin
GAAP gross profit	$	30,658,000			28.2	%	$	21,820,000			23.8	%
Adjustments:
Net sales
Initial return and stock adjustment accruals related to new business		1,315,000						-
Customer allowances related to new business		2,232,000						10,075,000
Cost of goods sold
New product line start-up costs		16,000						-
Lower of cost or market revaluation - cores on customers' shelves and inventory step-up amortization		475,000						326,000
Cost of customer allowances and stock adjustment accruals related to new business		(213,000	)					(809,000	)
Total adjustments		3,825,000			2.5	%		9,592,000			7.1	%
Adjusted gross profit	$	34,483,000			30.7	%	$	31,412,000			30.9	%

Reconciliation of Non-GAAP Financial Measures

Exhibit 6

	Six Months Ended September 30,
	2016						2015
	$			Gross Margin			$			Gross Margin
GAAP gross profit	$	51,049,000			26.3	%	$	47,811,000			26.9	%
Adjustments:
Net sales
Initial return and stock adjustment accruals related to new business		3,168,000						-
Customer allowances related to new business		8,789,000						10,863,000
Cost of goods sold
New product line start-up costs		140,000						-
Lower of cost or market revaluation - cores on customers' shelves and inventory step-up amortization		2,193,000						326,000
Cost of customer allowances and stock adjustment accruals related to new business		(568,000	)					(809,000	)
Total adjustments		13,722,000			5.1	%		10,380,000			4.0	%
Adjusted gross profit	$	64,771,000			31.4	%	$	58,191,000			30.9	%

Reconciliation of Non-GAAP Financial Measures

Exhibit 7

	Three Months Ended September 30,						Six Months Ended September 30,
	2016			2015			2016			2015
GAAP net income (loss)	$	9,143,000		$	(1,392,000	)	$	16,651,000		$	518,000
Interest expense, net		3,189,000			2,613,000			6,008,000			11,050,000
Income tax expense (benefit)		4,845,000			(898,000	)		7,781,000			370,000
Depreciation and amortization		910,000			740,000			1,770,000			1,431,000
EBITDA	$	18,087,000		$	1,063,000		$	32,210,000		$	13,369,000

Adjustments:
Net sales
Initial return and stock adjustment accruals related to new business		1,315,000			-			3,168,000			-
Customer allowances related to new business		2,232,000			10,075,000			8,789,000			10,863,000
Cost of goods sold								-
New product line start-up costs		16,000			-			140,000			-
Lower of cost or market revaluation - cores on customers' shelves and inventory step-up amortization		475,000			326,000			2,193,000			326,000
Cost of customer allowances and stock adjustment accruals related to new business		(213,000	)		(809,000	)		(568,000	)		(809,000	)
Operating expenses								-
Legal, severance, acquisition, financing, transition and other costs		219,000			1,112,000			615,000			4,253,000
Accrual made in connection with the settlement of litigation, net of insurance recoveries, related to discontinued subsidiaries		-			9,250,000			-			9,250,000
Share-based compensation expenses		1,008,000			517,000			1,737,000			1,033,000
Mark-to-market losses (gains)		1,331,000			1,147,000			(3,595,000	)		2,111,000
Adjusted EBITDA	$	24,470,000		$	22,681,000		$	44,689,000		$	40,396,000