NEWS RELEASE
|
|
CONTACT:
|
|
Gary S. Maier
|
|
Vice President, Corporate Communications & IR
|
|
(310) 972-5124
|
• |
Net sales increased 13.2 percent to $171.9 million.
|
• |
Gross margin improved by 3.7 percentage points.
|
• |
Gross profit increased 43.1 percent to $30.0 million.
|
• |
Operating income increased 170.1 percent to $9.5 million.
|
• |
The company generated cash of approximately $53.6 million.
|
• |
Sales volume continuing to gain momentum.
|
o |
Ordering activity expected to benefit from current extreme weather conditions.
|
o |
Industry fundamentals continue to drive product demand.
|
• |
Margin improvement.
|
o |
Enhanced by multiple rounds of price increases.
|
o |
Improving overhead absorption as brake-related business gains further momentum.
|
o |
Improving operational efficiencies through volume increases.
|
• |
Enhanced cash flow from working capital initiatives.
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
December 31,
|
December 31,
|
|||||||||||||||
2023
|
2022
|
2023
|
2022
|
|||||||||||||
Net sales
|
$
|
171,862,000
|
$
|
151,819,000
|
$
|
528,206,000
|
$
|
488,347,000
|
||||||||
Cost of goods sold
|
141,819,000
|
130,826,000
|
430,448,000
|
410,536,000
|
||||||||||||
Gross profit
|
30,043,000
|
20,993,000
|
97,758,000
|
77,811,000
|
||||||||||||
Operating expenses:
|
||||||||||||||||
General and administrative
|
15,198,000
|
13,599,000
|
42,125,000
|
42,079,000
|
||||||||||||
Sales and marketing
|
5,931,000
|
5,634,000
|
17,038,000
|
17,242,000
|
||||||||||||
Research and development
|
2,539,000
|
2,547,000
|
7,352,000
|
8,330,000
|
||||||||||||
Foreign exchange impact of lease liabilities and forward contracts
|
(3,149,000
|
)
|
(4,313,000
|
)
|
(2,659,000
|
)
|
(2,553,000
|
)
|
||||||||
Total operating expenses
|
20,519,000
|
17,467,000
|
63,856,000
|
65,098,000
|
||||||||||||
Operating income
|
9,524,000
|
3,526,000
|
33,902,000
|
12,713,000
|
||||||||||||
Other expenses:
|
||||||||||||||||
Interest expense, net
|
18,297,000
|
11,471,000
|
45,400,000
|
27,675,000
|
||||||||||||
Change in fair value of compound net derivative liability
|
1,160,000
|
-
|
1,690,000
|
-
|
||||||||||||
Loss on extinguishment of debt
|
-
|
-
|
168,000
|
-
|
||||||||||||
Total other expenses
|
19,457,000
|
11,471,000
|
47,258,000
|
27,675,000
|
||||||||||||
Loss before income tax expense (benefit)
|
(9,933,000
|
)
|
(7,945,000
|
)
|
(13,356,000
|
)
|
(14,962,000
|
)
|
||||||||
Income tax expense (benefit)
|
37,281,000
|
(8,971,000
|
)
|
37,226,000
|
(9,296,000
|
)
|
||||||||||
Net (loss) income
|
$
|
(47,214,000
|
)
|
$
|
1,026,000
|
$
|
(50,582,000
|
)
|
$
|
(5,666,000
|
)
|
|||||
Basic net (loss) income per share
|
$
|
(2.40
|
)
|
$
|
0.05
|
$
|
(2.58
|
)
|
$
|
(0.29
|
)
|
|||||
Diluted net (loss) income per share
|
$
|
(2.40
|
)
|
$
|
0.05
|
$
|
(2.58
|
)
|
$
|
(0.29
|
)
|
|||||
Weighted average number of shares outstanding:
|
||||||||||||||||
Basic
|
19,634,306
|
19,474,871
|
19,580,960
|
19,383,531
|
||||||||||||
Diluted
|
19,634,306
|
19,634,153
|
19,580,960
|
19,383,531
|
December 31, 2023
|
March 31, 2023
|
|||||||
ASSETS
|
(Unaudited)
|
|||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
12,155,000
|
$
|
11,596,000
|
||||
Short-term investments
|
2,206,000
|
2,011,000
|
||||||
Accounts receivable — net
|
93,008,000
|
119,868,000
|
||||||
Inventory
|
393,777,000
|
356,254,000
|
||||||
Contract assets
|
25,236,000
|
25,443,000
|
||||||
Prepaid expenses and other current assets
|
17,978,000
|
22,306,000
|
||||||
Total current assets
|
544,360,000
|
537,478,000
|
||||||
Plant and equipment — net
|
39,644,000
|
46,052,000
|
||||||
Operating lease assets
|
85,187,000
|
87,619,000
|
||||||
Long-term deferred income taxes
|
2,447,000
|
32,625,000
|
||||||
Long-term contract assets
|
318,323,000
|
318,381,000
|
||||||
Goodwill and intangible assets — net
|
4,461,000
|
5,348,000
|
||||||
Other assets
|
1,511,000
|
1,062,000
|
||||||
TOTAL ASSETS
|
$
|
995,933,000
|
$
|
1,028,565,000
|
||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable and accrued liabilities
|
$
|
178,881,000
|
$
|
141,766,000
|
||||
Customer finished goods returns accrual
|
37,883,000
|
37,984,000
|
||||||
Contract liabilities
|
43,848,000
|
40,340,000
|
||||||
Revolving loan
|
115,000,000
|
145,200,000
|
||||||
Other current liabilities
|
5,369,000
|
4,871,000
|
||||||
Operating lease liabilities
|
8,564,000
|
8,767,000
|
||||||
Current portion of term loan
|
-
|
3,664,000
|
||||||
Total current liabilities
|
389,545,000
|
382,592,000
|
||||||
Term loan, less current portion
|
-
|
9,279,000
|
||||||
Convertible notes, related party
|
33,226,000
|
30,994,000
|
||||||
Long-term contract liabilities
|
206,590,000
|
193,606,000
|
||||||
Long-term deferred income taxes
|
74,000
|
718,000
|
||||||
Long-term operating lease liabilities
|
73,725,000
|
79,318,000
|
||||||
Other liabilities
|
11,021,000
|
11,583,000
|
||||||
Total liabilities
|
714,181,000
|
708,090,000
|
||||||
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; 19,662,380 and
19,494,615 shares issued and outstanding at December 31, 2023 and March 31, 2023, respectively
|
197,000
|
195,000
|
||||||
Additional paid-in capital
|
235,823,000
|
231,836,000
|
||||||
Retained earnings
|
38,165,000
|
88,747,000
|
||||||
Accumulated other comprehensive income (loss)
|
7,567,000
|
(303,000
|
)
|
|||||
Total shareholders' equity
|
281,752,000
|
320,475,000
|
||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
|
$
|
995,933,000
|
$
|
1,028,565,000
|
Three Months Ended December 31,
|
||||||||||||||||
2023
|
2022
|
|||||||||||||||
|
$ |
Per Share
|
$ |
Per Share
|
||||||||||||
GAAP net (loss) income
|
$
|
(47,214,000
|
)
|
$
|
(2.40
|
)
|
$
|
1,026,000
|
$
|
0.05
|
||||||
Non-cash items impacting net (loss) income
|
||||||||||||||||
Core and finished goods premium amortization
|
$
|
2,838,000
|
$
|
0.14
|
$
|
3,075,000
|
$
|
0.16
|
||||||||
Revaluation - cores on customers' shelves
|
1,607,000
|
0.08
|
863,000
|
0.04
|
||||||||||||
Share-based compensation expenses
|
1,425,000
|
0.07
|
1,021,000
|
0.05
|
||||||||||||
Foreign exchange impact of lease liabilities and forward contracts
|
(3,149,000
|
)
|
(0.16
|
)
|
(4,313,000
|
)
|
(0.22
|
)
|
||||||||
Change in fair value of compound net derivative liability
|
1,160,000
|
0.06
|
-
|
-
|
||||||||||||
Tax effect (a)
|
(970,000
|
)
|
(0.05
|
)
|
(162,000
|
)
|
(0.01
|
)
|
||||||||
Tax valuation allowance
|
37,461,000
|
1.91
|
-
|
-
|
||||||||||||
Total non-cash items impacting net (loss) income
|
$
|
40,372,000
|
$
|
2.06
|
$
|
484,000
|
$
|
0.02
|
||||||||
Cash items impacting net (loss) income
|
||||||||||||||||
Supply chain disruptions and related costs (b)
|
$
|
1,555,000
|
$
|
0.08
|
$
|
2,649,000
|
$
|
0.13
|
||||||||
New product line start-up costs and transition expenses, and severance (c)
|
296,000
|
0.02
|
1,103,000
|
0.06
|
||||||||||||
Tax effect (a)
|
(463,000
|
)
|
(0.02
|
)
|
(938,000
|
)
|
(0.05
|
)
|
||||||||
Total cash items impacting net (loss) income
|
$
|
1,388,000
|
$
|
0.07
|
$
|
2,814,000
|
$
|
0.14
|
Nine Months Ended December 31,
|
||||||||||||||||
2023
|
2022
|
|||||||||||||||
|
$ |
Per Share
|
|
$ |
Per Share
|
|||||||||||
GAAP net loss
|
$
|
(50,582,000
|
)
|
$
|
(2.58
|
)
|
$
|
(5,666,000
|
)
|
$
|
(0.29
|
)
|
||||
Non-cash items impacting net loss
|
||||||||||||||||
Core and finished goods premium amortization
|
$
|
8,202,000
|
$
|
0.42
|
$
|
9,183,000
|
$
|
0.47
|
||||||||
Revaluation - cores on customers' shelves
|
4,380,000
|
0.22
|
2,704,000
|
0.14
|
||||||||||||
Share-based compensation expenses
|
4,268,000
|
0.22
|
3,521,000
|
0.18
|
||||||||||||
Foreign exchange impact of lease liabilities and forward contracts
|
(2,659,000
|
)
|
(0.14
|
)
|
(2,553,000
|
)
|
(0.13
|
)
|
||||||||
Change in fair value of compound net derivative liability and loss on extinguishment of debt
|
1,858,000
|
0.09
|
-
|
-
|
||||||||||||
Tax effect (a)
|
(4,012,000
|
)
|
(0.20
|
)
|
(3,214,000
|
)
|
(0.17
|
)
|
||||||||
Tax valuation allowance
|
37,461,000
|
1.91
|
-
|
-
|
||||||||||||
Total non-cash items impacting net loss
|
$
|
49,498,000
|
$
|
2.53
|
$
|
9,641,000
|
$
|
0.50
|
||||||||
Cash items impacting net loss
|
||||||||||||||||
Supply chain disruptions and related costs (b)
|
$
|
6,738,000
|
$
|
0.34
|
$
|
9,963,000
|
$
|
0.51
|
||||||||
New product line start-up costs and transition expenses, and severance (c)
|
980,000
|
0.05
|
2,642,000
|
0.14
|
||||||||||||
Tax effect (a)
|
(1,930,000
|
)
|
(0.10
|
)
|
(3,151,000
|
)
|
(0.16
|
)
|
||||||||
Total cash items impacting net loss
|
$
|
5,788,000
|
$
|
0.30
|
$
|
9,454,000
|
$
|
0.49
|
Three Months Ended December 31,
|
||||||||||||||||
2023
|
2022
|
|||||||||||||||
$ |
Gross
Margin
|
$ |
Gross
Margin
|
|||||||||||||
GAAP gross profit
|
$
|
30,043,000
|
17.5
|
%
|
$
|
20,993,000
|
13.8
|
%
|
||||||||
Non-cash items impacting gross profit
|
||||||||||||||||
Core and finished goods premium amortization
|
$
|
2,838,000
|
1.7
|
%
|
$
|
3,075,000
|
2.0
|
%
|
||||||||
Revaluation - cores on customers' shelves
|
1,607,000
|
0.9
|
%
|
863,000
|
0.6
|
%
|
||||||||||
Total non-cash items impacting gross profit
|
$
|
4,445,000
|
2.6
|
%
|
$
|
3,938,000
|
2.6
|
%
|
||||||||
Cash items impacting gross profit
|
||||||||||||||||
Supply chain disruptions and related costs
|
$
|
1,555,000
|
0.9
|
%
|
$
|
2,370,000
|
1.6
|
%
|
||||||||
Total cash items impacting gross profit
|
$
|
1,555,000
|
0.9
|
%
|
$
|
2,370,000
|
1.6
|
%
|
Nine Months Ended December 31,
|
||||||||||||||||
2023
|
2022
|
|||||||||||||||
|
$ |
Gross
Margin
|
|
$ |
Gross
Margin
|
|||||||||||
GAAP gross profit
|
$
|
97,758,000
|
18.5
|
%
|
$
|
77,811,000
|
15.9
|
%
|
||||||||
Non-cash items impacting gross profit
|
||||||||||||||||
Core and finished goods premium amortization
|
$
|
8,202,000
|
1.6
|
%
|
$
|
9,183,000
|
1.9
|
%
|
||||||||
Revaluation - cores on customers' shelves
|
4,380,000
|
0.8
|
%
|
2,704,000
|
0.6
|
%
|
||||||||||
Total non-cash items impacting gross profit
|
$
|
12,582,000
|
2.4
|
%
|
$
|
11,887,000
|
2.4
|
%
|
||||||||
Cash items impacting gross profit
|
||||||||||||||||
Supply chain disruptions and related costs
|
$
|
6,738,000
|
1.3
|
%
|
$
|
8,572,000
|
1.8
|
%
|
||||||||
Total cash items impacting gross profit
|
$
|
6,738,000
|
1.3
|
%
|
$
|
8,572,000
|
1.8
|
%
|
Three Months Ended December 31,
|
Nine Months Ended December 31,
|
|||||||||||||||
2023
|
2022
|
2023
|
2022
|
|||||||||||||
GAAP net (loss) income
|
$
|
(47,214,000
|
)
|
$
|
1,026,000
|
$
|
(50,582,000
|
)
|
$
|
(5,666,000
|
)
|
|||||
Interest expense, net
|
18,297,000
|
11,471,000
|
45,400,000
|
27,675,000
|
||||||||||||
Income tax expense (benefit)
|
37,281,000
|
(8,971,000
|
)
|
37,226,000
|
(9,296,000
|
)
|
||||||||||
Depreciation and amortization
|
2,878,000
|
3,108,000
|
8,844,000
|
9,322,000
|
||||||||||||
EBITDA
|
$
|
11,242,000
|
$
|
6,634,000
|
$
|
40,888,000
|
$
|
22,035,000
|
||||||||
Non-cash items impacting EBITDA
|
||||||||||||||||
Core and finished goods premium amortization
|
$
|
2,838,000
|
$
|
3,075,000
|
$
|
8,202,000
|
$
|
9,183,000
|
||||||||
Revaluation - cores on customers' shelves
|
1,607,000
|
863,000
|
4,380,000
|
2,704,000
|
||||||||||||
Share-based compensation expenses
|
1,425,000
|
1,021,000
|
4,268,000
|
3,521,000
|
||||||||||||
Foreign exchange impact of lease liabilities and forward contracts
|
(3,149,000
|
)
|
(4,313,000
|
)
|
(2,659,000
|
)
|
(2,553,000
|
)
|
||||||||
Change in fair value of compound net derivative liability and loss on extinguishment of debt
|
1,160,000
|
-
|
1,858,000
|
-
|
||||||||||||
Total non-cash items impacting EBITDA
|
$
|
3,881,000
|
$
|
646,000
|
$
|
16,049,000
|
$
|
12,855,000
|
||||||||
|
||||||||||||||||
Cash items impacting EBITDA
|
||||||||||||||||
Supply chain disruptions and related costs
|
$
|
1,555,000
|
$
|
2,649,000
|
$
|
6,738,000
|
$
|
9,963,000
|
||||||||
New product line start-up costs and transition expenses, and severance
|
296,000
|
1,103,000
|
980,000
|
2,642,000
|
||||||||||||
Total cash items impacting EBITDA
|
$
|
1,851,000
|
$
|
3,752,000
|
$
|
7,718,000
|
$
|
12,605,000
|