Motorcar Parts of America (MPAA) swings to Q1 loss but reaffirms 2027 outlook
Rhea-AI Filing Summary
Motorcar Parts of America, Inc. reported fiscal 2027 first quarter results for the three months ended June 30, 2026, marked by weaker sales but reaffirmed full-year guidance. Net sales were $168.0 million, down from $188.4 million a year earlier, which the company attributes to timing of customer orders, temporary customer inventory liquidations tied to a competitor’s bankruptcy, and the planned relocation of Canadian heavy-duty operations to Mexico.
Gross profit declined to $27.2 million with gross margin of 16.2% versus 18.0%, including a roughly 2% or $3.5 million negative foreign currency impact. Excluding non-cash expenses of 2.4% and one-time cash items of 1.6%, gross margin was 20.2%. Operating income fell to $3.5 million from $20.1 million; adjusting for non-cash and certain one-time cash items, operating income was $11.2 million versus $18.0 million. Net results shifted from net income of $3.0 million ($0.15 per diluted share) to a net loss of $13.4 million ($0.71 per share), affected by $4.6 million of non-cash expenses and $2.3 million of one-time items.
Interest expense decreased to $12.0 million from $12.8 million. The company highlighted renewal of its loan agreement and extension of its revolver maturity to August 2031 and reported net bank debt of $99.7 million, based on a $118.8 million revolver balance and $19.1 million of cash. During the quarter it repurchased 129,523 shares for $1.9 million, with $20.1 million remaining under its share repurchase authorization, and emphasized growth opportunities, particularly for its Centric Parts brake business.
Positive
- The company reaffirmed its fiscal 2027 full-year guidance despite a weaker first quarter, signaling management’s confidence in the outlook.
- Management renewed its loan agreement and extended the revolver credit facility maturity to August 2031, supporting long-term liquidity.
- The Centric Parts brake business, with estimated historical gross sales as high as $400 million at the supplier level, is drawing considerable customer interest.
- The company repurchased 129,523 shares for $1.9 million at an average price of $14.98 and still has $20.1 million remaining under its share repurchase authorization.
Negative
- Net sales declined to $168.0 million from $188.4 million, a drop of more than 10%, driven by order timing, competitor bankruptcy dynamics, and operational relocation.
- Gross margin contracted to 16.2% from 18.0%, with an estimated $3.5 million (about 2%) negative impact from foreign currency fluctuations.
- Operating income decreased sharply to $3.5 million from $20.1 million; even on an adjusted basis it was $11.2 million versus $18.0 million a year earlier.
- Results swung from net income of $3.0 million ($0.15 per diluted share) to a net loss of $13.4 million ($0.71 per share), including $4.6 million of non-cash expenses and $2.3 million of one-time items.
Filing Explained
This Form 8-K furnishes the June 30, 2026 earnings release under Item 2.02; the release is not incorporated into other filings and is not treated as filed for Section 18 or Securities Act Sections 11 and 12(a)(2) liability unless specifically incorporated.
8-K Event Classification
2 items: 2.02, 9.01
2 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Net sales: $168,021,000
Gross margin: 16.2%
Operating income: $3,532,000
+5 more
8 metrics
Net sales
$168,021,000
Three months ended June 30, 2026; down from $188,364,000 in prior-year period
Gross margin
16.2%
Three months ended June 30, 2026; GAAP gross profit $27,174,000
Operating income
$3,532,000
Three months ended June 30, 2026; compared with $20,069,000 a year earlier
Net (loss) income
$(13,421,000)
Three months ended June 30, 2026; versus net income of $3,042,000 in 2025
Diluted EPS
$(0.71)
Three months ended June 30, 2026; prior-year diluted EPS was $0.15
Net bank debt
$99,700,000
Revolver loan of $118,800,000 less cash of $19,100,000 at June 30, 2026
Share repurchases
$1,900,000
129,523 shares repurchased in fiscal 2027 Q1 at $14.98 average price
Total assets
$1,010,024,000
Consolidated balance sheet as of June 30, 2026
Key Terms
EBITDA, non-GAAP, revolving loan, compound net derivative liability, +2 more
6 terms
EBITDA financial
"The company defines EBITDA as earnings before interest, taxes, depreciation, and amortization."
EBITDA stands for earnings before interest, taxes, depreciation, and amortization. It measures a company's profitability by focusing on the money it makes from its core operations, ignoring expenses like taxes and accounting adjustments. Investors use EBITDA to compare how well different companies are performing financially, as it provides a clearer picture of operational success without the influence of financial structure or accounting choices.
non-GAAP financial
"This press release includes the following non-GAAP measure – EBITDA, which is not a measure of financial performance under GAAP."
Non-GAAP refers to financial measures that companies use to show their earnings or performance without including certain expenses or income that are often added back to give a different picture. It matters because it can make a company's results look better or more favorable, but it may also hide important costs, so investors need to look at both GAAP (official rules) and non-GAAP numbers to get a full understanding.
revolving loan financial
"After share repurchases and the purchase of Centric Parts brake brands, net bank debt was $99.7 million – reflecting a revolver loan of $118.8 million."
A revolving loan is a credit line a company can draw, repay, and draw again up to a set limit during the loan term — like a corporate credit card where interest is charged only on the amount used. It matters to investors because it supplies flexible short-term cash for operations or growth but can raise borrowing costs and leverage; reductions in the available limit or tighter terms can signal liquidity stress or increase financial risk.
compound net derivative liability financial
"Change in fair value of compound net derivative liability was $1,540,000 in 2026 and $1,790,000 in 2025."
foreign exchange impact of lease liabilities and forward contracts financial
"Foreign exchange impact of lease liabilities and forward contracts was $(1,597,000) in 2026."
Earnings Snapshot
Net sales: $168,021,000 · Guidance included
Three months ended June 30, 2026 (fiscal 2027 first quarter)
Net sales
$168,021,000
Decreased from $188,364,000 in the prior-year quarter
Operating income
$3,532,000
Decreased from $20,069,000 in the prior-year quarter
Net (loss) income
$(13,421,000)
Declined from net income of $3,042,000 in the prior-year quarter
Diluted EPS
$(0.71)
Down from diluted EPS of $0.15 in the prior-year quarter
Gross margin
16.2%
Down from 18.0% in the prior-year quarter; adjusted to 20.2% excluding specified items
Guidance
The company reaffirmed its fiscal 2027 full-year guidance and expects brake-related products, including Centric Parts, to gain momentum throughout the fiscal year.
AI-generated analysis. How Rhea-AI works. Not financial advice.
FAQ
How did MPAA’s net sales perform in fiscal 2027 Q1?
MPAA reported net sales of $168.0 million for fiscal 2027 Q1, down from $188.4 million a year earlier. Management cited order timing, competitor bankruptcy-related inventory liquidations, and relocating Canadian heavy-duty operations to Mexico as key factors.
Did Motorcar Parts of America (MPAA) make a profit in fiscal 2027 Q1?
MPAA recorded a net loss of $13.4 million, or $0.71 per share, for fiscal 2027 Q1, compared with net income of $3.0 million, or $0.15 per diluted share, in the prior-year quarter, reflecting lower sales and several non-cash and one-time items.
What happened to MPAA’s gross margin in the quarter ended June 30, 2026?
Gross margin declined to 16.2% from 18.0% in the prior-year period. Management noted 2.4 percentage points of non-cash expenses, 1.6 percentage points of one-time cash items, and about $3.5 million (roughly 2%) of negative foreign currency impact.
Did MPAA reaffirm its full-year fiscal 2027 guidance?
Yes, MPAA reaffirmed its fiscal 2027 guidance despite first-quarter sales headwinds. The company expects brake-related products, including its Centric Parts business, to gain momentum and supports its outlook with significant new business opportunities in North America.
What is MPAA’s debt and liquidity position after fiscal 2027 Q1?
After Q1, MPAA reported net bank debt of $99.7 million, based on a $118.8 million revolver loan and $19.1 million of cash. The company also renewed its loan agreement and extended the revolver’s maturity date to August 2031.
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): August 10, 2026
(Exact name of registrant as specified in its charter)
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(Address of principal executive offices)
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(Zip Code)
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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:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule l4a-12 under the Exchange Act (17 CFR 240.l4a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the
Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised
financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Securities registered pursuant to Section 12(b) of the Act:
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Results of Operations and Financial Condition
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On August 10, 2026, Motorcar Parts of America, Inc. (the “Company”) issued a press release
announcing its earnings for the fiscal quarter ended June 30, 2026 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.
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Financial Statements and Exhibits.
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The following exhibit is furnished with this Current Report pursuant to Item 2.02:
(d) Exhibits
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Exhibit No.
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Description
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99.1
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Press Release, dated August 10, 2026
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104
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Cover Page Interactive Data File (embedded within the Inline XBRL document).
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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.
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MOTORCAR PARTS OF AMERICA, INC.
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Date: August 10, 2026
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/s/ David Lee
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David Lee
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Chief Financial Officer
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Exhibit 99.1
NEWS RELEASE
CONTACT:
Gary S. Maier
Vice President, Corporate Communications & IR
(310) 972-5124
MOTORCAR PARTS OF AMERICA REPORTS FISCAL 2027 FIRST QUARTER RESULTS
Company Reaffirms Full-Year Guidance;
Brake-Related Products Expected to Gain Momentum Throughout Fiscal Year
LOS ANGELES, CA – August 10, 2026 – Motorcar Parts of America, Inc. (Nasdaq: MPAA) today reported financial results for its fiscal 2027 first quarter ended June 30, reflecting timing of orders, with the
company still on target to meet its expectations for the full year.
Positive Drivers:
| • |
Reaffirms fiscal 2027 net sales guidance between $780 million and $800 million and operating income between $86 million and $91 million, excluding certain non-cash and one-time expenses.
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Expects to add more than $100 million of additional annualized net sales by the end of fiscal 2027, with annualized net sales to be more than $900 million by the end of fiscal 2027, as referenced in
the fiscal year-end release.
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Significant new business commitments.
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Additional opportunities are expected from the Centric Parts brand relaunch.
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Increasing utilization of brake-related capacity to support margin accretion.
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Three-Month Results
Net sales for the first quarter
of fiscal 2027 were $168.0 million, compared with $188.4 million in the prior-year period, consistent with the company’s expectations. The company is reaffirming its fiscal 2027 guidance. The year-over-year decline in net sales was primarily
attributable to the anticipated timing of customer orders. In addition, certain new business opportunities were temporarily impacted as customers took advantage of inventory liquidations associated with the bankruptcy of a competitor. The company
believes this dynamic has begun to reverse. Net sales during the quarter were also delayed by the planned strategic relocation of the company’s Canadian heavy-duty operations to its manufacturing facilities in Mexico.
Motorcar Parts of America, Inc.
2-2-2
Gross profit for the fiscal 2027 first quarter was $27.2 million compared with $33.9 million a year earlier. Gross margin for the same period was 16.2 percent compared with 18.0 percent a year ago. Gross margin was impacted by non-cash expenses of 2.4 percent and one-time items of 1.6 percent as detailed in Exhibit 2. Excluding these non-cash expenses and certain
one-time cash items, gross margin was 20.2 percent. In addition, the company noted that gross margin was negatively impacted by approximately 2 percent, or $3.5 million, due to foreign currency fluctuations.
Operating income for the fiscal
2027 first quarter was $3.5 million compared with $20.1 million in the prior year. Operating income was impacted by non-cash expenses of $4.7 million, and one-time items of $3.0 million as detailed in Exhibit 4. Operating income for the prior year
benefited from non-cash items of $3.5 million, and partially offset by one-time cash expenses of $1.4 million, as detailed in Exhibit 4. Excluding these non-cash and certain one-time cash items,
operating income was $11.2 million, which includes the $3.5 million unfavorable impact due to foreign currency fluctuations noted above, compared with $18.0 million in the prior year period.
Interest expense for the fiscal 2027 first quarter decreased by $768,000 to $12.0 million from
$12.8 million a year ago, primarily due to lower sales which resulted in lower utilization of accounts receivable discount programs.
Net loss for the fiscal 2027 first quarter was $13.4 million, or $0.71 per share, compared with net
income of $3.0 million, or $0.15 per diluted share, for the prior year. Net loss was impacted by non-cash expenses of $4.6 million, or $0.25 per share, and one-time items of $2.3 million, or $0.12 per share, as detailed in Exhibit 1, and other items
noted above.
“We remain confident about our ability to achieve our annual guidance, notwithstanding some expected sales head winds that we and
the industry experienced in the first quarter,” said Selwyn Joffe, chairman, president and chief executive officer.
He reemphasized the company’s significant new business commitments and opportunities in North America -- supported by strength across all product lines, in particular the additive Centric Parts brake business with estimated historical gross sales as high as $400 million at the supplier level.
“We have received considerable customer interest in Centric Parts since our recent announcement,” Joffe added.
Joffe highlighted the company recently announced the renewal of its loan agreement and extension of the maturity date of the revolver credit facility to August 2031 led by PNC Bank, N.A. The renewal recognizes the company’s milestones, solid position within the
automotive aftermarket and management’s commitment to strategic growth and profitability.
Motorcar Parts of America, Inc.
3-3-3
After share repurchases of $1.9 million for the fiscal 2027 first quarter and the recent purchase of Centric Parts brake brands, net bank debt was $99.7
million – reflecting a revolver loan of $118.8 million less cash of $19.1 million at June 30, 2026.
Share Repurchase
During the fiscal 2027 first quarter, the company repurchased 129,523 shares for $1.9 million at an average share price of $14.98 under its current authorization program. The company has $20.1
million remaining to repurchase shares under its current authorized share repurchase program.
The company anticipates opportunities to build shareholder value through sales gains, enhanced profitability and strong cash generation.
Use of Non-GAAP Measure
This press release includes the following non-GAAP measure – EBITDA, which is not a measure of financial performance under GAAP and
should not be considered as an alternative to net income as a measure of financial performance. The company believes this non-GAAP measure, when considered together with the corresponding GAAP measures, provides useful information to investors and
management regarding financial and business trends relating to the company’s results of operations. However, this non-GAAP measure has significant limitations in that it does not reflect all the costs and other items associated with the operation of
the company’s business as determined in accordance with GAAP. In addition, the company’s non-GAAP measures may be calculated differently and are therefore not comparable to similar measures by other companies. 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 definition and reconciliation of EBITDA to net income, its corresponding GAAP measure, 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 this measure.
Earnings Conference Call and Webcast
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 Web broadcast via the company’s investor relations site at www.motorcarparts.com and
the tab Events and Presentations or by calling (833) 461-5787 (domestic). Meeting ID
406 025 397.
Participants are encouraged to pre-register for the conference call to receive call details and faster access to the event. A listing of dial-in
numbers for international participants is available via: https://help.events.q4inc.com/eahc/international-dial-in-numbers.
For those who are not available to listen to the live broadcast, a replay of the call will be archived on Motorcar Parts of America’s investor relations
site www.motorcarparts.com for a seven-day period.
Motorcar Parts of America, Inc.
4-4-4
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 bearings and hub assemblies, brake calipers, brake pads, brake rotors, brake master cylinders, brake power boosters, and diagnostic testing equipment utilized in imported and
domestic passenger vehicles, light trucks, and heavy-duty applications. Its products are sold to automotive retail outlets and the professional repair market throughout the United States, Canada, and Mexico, with facilities located in California,
New York, Mexico, Malaysia, China and India, and administrative offices located in California, Tennessee, Mexico, Singapore, Malaysia, and Canada. In addition, the company’s electrical vehicle subsidiary designs and manufactures testing solutions
for performance, endurance, and production of multiple components in the electric power train – providing simulation, emulation, and production applications for the electrification of both automotive and aerospace industries, including electric
vehicle charging systems. Additional information is available at www.motorcarparts.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements
regarding future financial performance, sales growth, margin improvement, operating efficiencies, customer demand, new business opportunities, capacity utilization, working capital, liquidity, debt levels, cash flow, strategic initiatives, and market
conditions. These statements are based on current expectations, estimates, forecasts, and assumptions and are not guarantees of future performance. Actual results may differ materially from those expressed or implied by these forward-looking
statements due to risks and uncertainties, including changes in customer ordering patterns, customer concentration, competitive conditions, supply-chain constraints, inflation, tariffs, interest rates, credit availability, labor and production costs,
inventory levels, operational execution, macroeconomic conditions, and the other risks described in the company’s most recent Form 10-K, Forms 10-Q, and other filings with the Securities and Exchange Commission. The company undertakes no obligation
to update or revise any forward-looking statements, except as required by law.
# # #
(Financial tables follow)
MOTORCAR PARTS OF AMERICA, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited)
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Three Months Ended
June 30, |
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2026
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2025
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Net sales
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$
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168,021,000
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$
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188,364,000
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Cost of goods sold
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140,847,000
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154,447,000
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Gross profit
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27,174,000
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33,917,000
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Operating expenses:
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General and administrative
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15,517,000
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12,680,000
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Sales and marketing
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6,546,000
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6,210,000
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Research and development
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3,176,000
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3,306,000
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Foreign exchange impact of lease liabilities and forward contracts
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(1,597,000
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)
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(8,348,000
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)
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Total operating expenses
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23,642,000
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13,848,000
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Operating income
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3,532,000
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20,069,000
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Other expenses:
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Interest expense, net
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12,044,000
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12,812,000
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Change in fair value of compound net derivative liability
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1,540,000
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1,790,000
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Total other expenses
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13,584,000
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14,602,000
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(Loss) income before income tax expense
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(10,052,000
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)
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5,467,000
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Income tax expense
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3,369,000
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2,425,000
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Net (loss) income
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$
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(13,421,000
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)
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$
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3,042,000
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Basic net (loss) income per share
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$
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(0.71
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)
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$
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0.16
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Diluted net (loss) income per share
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$
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(0.71
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)
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$
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0.15
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Weighted average number of shares outstanding:
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Basic
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18,922,938
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19,369,060
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Diluted
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18,922,938
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19,917,663
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MOTORCAR PARTS OF AMERICA, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
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June 30, 2026
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March 31, 2026
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ASSETS
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(Unaudited)
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Current assets:
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Cash and cash equivalents
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$
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19,120,000
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$
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14,650,000
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Short-term investments
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2,279,000
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2,028,000
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Accounts receivable — net
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71,362,000
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112,614,000
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Inventory — net
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413,289,000
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397,041,000
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Contract assets
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35,057,000
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34,552,000
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Prepaid expenses and other current assets
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23,056,000
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23,097,000
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Total current assets
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564,163,000
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583,982,000
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Plant and equipment — net
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29,300,000
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30,739,000
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Operating lease assets
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63,833,000
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63,103,000
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Long-term deferred income taxes
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4,304,000
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4,039,000
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Long-term contract assets
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338,242,000
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331,221,000
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||||||
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Goodwill and intangible assets — net
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7,355,000
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3,440,000
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||||||
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Other assets
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2,827,000
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2,913,000
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||||||
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TOTAL ASSETS
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$
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1,010,024,000
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$
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1,019,437,000
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||||
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LIABILITIES AND SHAREHOLDERS’ EQUITY
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||||||||
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Current liabilities:
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||||||||
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Accounts payable and accrued liabilities
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$
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177,487,000
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$
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200,499,000
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||||
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Customer finished goods returns accrual
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33,164,000
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29,923,000
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||||||
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Contract liabilities
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47,570,000
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61,201,000
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||||||
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Revolving loan
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118,839,000
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94,668,000
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||||||
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Other current liabilities
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4,695,000
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4,348,000
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||||||
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Operating lease liabilities
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9,398,000
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8,957,000
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||||||
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Total current liabilities
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391,153,000
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399,596,000
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||||||
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Convertible notes, related party
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44,795,000
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38,993,000
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||||||
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Long-term contract liabilities
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256,961,000
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249,108,000
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||||||
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Long-term deferred income taxes
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406,000
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425,000
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||||||
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Long-term operating lease liabilities
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55,665,000
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56,969,000
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||||||
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Other liabilities
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8,055,000
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8,336,000
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||||||
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Total liabilities
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757,035,000
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753,427,000
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||||||
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Commitments and contingencies
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||||||||
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Shareholders’ equity:
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||||||||
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Preferred stock; par value $.01 per share, 5,000,000 shares authorized; none issued
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-
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-
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||||||
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Series A junior participating preferred stock; par value $.01 per share, 20,000 shares authorized; none issued
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-
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-
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||||||
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Common stock; par value $.01 per share, 50,000,000 shares authorized; 18,933,207 and 18,924,818 shares issued and outstanding at June 30, 2026
and March 31, 2026, respectively
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189,000
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189,000
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||||||
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Additional paid-in capital
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225,827,000
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226,709,000
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||||||
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Retained earnings
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19,006,000
|
32,427,000
|
||||||
|
Accumulated other comprehensive income
|
7,967,000
|
6,685,000
|
||||||
|
Total shareholders’ equity
|
252,989,000
|
266,010,000
|
||||||
|
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
|
$
|
1,010,024,000
|
$
|
1,019,437,000
|
||||
Additional Information and 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 additional information and non-GAAP financial measures for the three months ended June 30, 2026 and 2025. Among other things, the company uses such additional information and non-GAAP adjusted financial measures in addition to and together
with corresponding GAAP measures to help analyze the performance of its business.
The company believes this information helps provide a more complete understanding of the company’s results of operations and the factors and trends affecting the company’s
business. However, this information should be considered as a supplement to, and not as a substitute for, or superior to, information contained in the company’s financial statements prepared in accordance with GAAP. In addition, the company’s
non-GAAP measures may be calculated differently and are therefore not comparable to similar measures by other companies.
The company defines EBITDA as earnings before interest, taxes, depreciation, and amortization. A reconciliation of EBITDA to net income is provided below along with
information regarding such items.
|
Items Impacting Net Income for the Three Months Ended June 30, 2026 and 2025
|
Exhibit 1
|
|
Three Months Ended June 30,
|
||||||||||||||||
|
2026
|
2025
|
|||||||||||||||
|
|
$ |
Per Diluted
Share
|
|
$ |
Per Diluted
Share
|
|||||||||||
|
GAAP net (loss) income
|
$
|
(13,421,000
|
)
|
$
|
(0.71
|
)
|
$
|
3,042,000
|
$
|
0.15
|
||||||
|
Non-cash items impacting net income
|
||||||||||||||||
|
Core and finished goods premium amortization
|
$
|
3,406,000
|
$
|
0.18
|
$
|
2,847,000
|
$
|
0.14
|
||||||||
|
Revaluation - cores on customers’ shelves
|
705,000
|
0.04
|
1,026,000
|
0.05
|
||||||||||||
|
Share-based compensation expenses
|
2,138,000
|
0.11
|
946,000
|
0.05
|
||||||||||||
|
Foreign exchange impact of lease liabilities and forward contracts
|
(1,597,000
|
)
|
(0.08
|
)
|
(8,348,000
|
)
|
(0.42
|
)
|
||||||||
|
Change in fair value of compound net derivative liability
|
1,540,000
|
0.08
|
1,790,000
|
0.09
|
||||||||||||
|
Tax effect (a)
|
(1,548,000
|
)
|
(0.08
|
)
|
435,000
|
0.02
|
||||||||||
|
Total non-cash items impacting net income
|
$
|
4,644,000
|
$
|
0.25
|
$
|
(1,304,000
|
)
|
$
|
(0.07
|
)
|
||||||
|
Cash items impacting net income
|
||||||||||||||||
|
Transition expenses and severance (b)
|
3,014,000
|
0.16
|
-
|
-
|
||||||||||||
|
Net tariff costs paid for products sold before price increases were effective
|
-
|
-
|
1,426,000
|
0.07
|
||||||||||||
|
Tax effect (a)
|
(754,000
|
)
|
(0.04
|
)
|
(357,000
|
)
|
(0.02
|
)
|
||||||||
|
Total cash items impacting net income
|
$
|
2,260,000
|
$
|
0.12
|
$
|
1,069,000
|
$
|
0.05
|
||||||||
(a) Tax effect is calculated by applying an income tax rate of 25.0% to items listed above; this rate may differ from the period’s actual income tax rate.
(b) For the three months ended June 30, 2026, consists of $2,767,000 impacting gross profit and $247,000 included in operating expenses.
|
Items Impacting Gross Profit for the Three Months Ended June 30, 2026 and 2025
|
Exhibit 2
|
|
Three Months Ended June 30,
|
||||||||||||||||
|
2026
|
2025
|
|||||||||||||||
|
|
$ |
Gross Margin
|
|
$ |
Gross Margin
|
|||||||||||
|
GAAP gross profit
|
$
|
27,174,000
|
16.2
|
%
|
$
|
33,917,000
|
18.0
|
%
|
||||||||
|
Non-cash items impacting gross profit
|
||||||||||||||||
|
Core and finished goods premium amortization
|
$
|
3,406,000
|
2.0
|
%
|
$
|
2,847,000
|
1.5
|
%
|
||||||||
|
Revaluation - cores on customers’ shelves
|
705,000
|
0.4
|
%
|
1,026,000
|
0.5
|
%
|
||||||||||
|
Total non-cash items impacting gross profit
|
$
|
4,111,000
|
2.4
|
%
|
$
|
3,873,000
|
2.1
|
%
|
||||||||
|
Cash items impacting gross profit
|
||||||||||||||||
|
Transition expenses and severance
|
2,767,000
|
1.6
|
%
|
-
|
-
|
|||||||||||
|
Net tariff costs paid for products sold before price increases were effective
|
-
|
-
|
1,426,000
|
0.8
|
%
|
|||||||||||
|
Total cash items impacting gross profit
|
$
|
2,767,000
|
1.6
|
%
|
$
|
1,426,000
|
0.8
|
%
|
||||||||
Note: the above items impacting gross profit do not include approximately $3.5 million, or approximately 2% gross margin, unfavorable impact due to foreign currency
fluctuations
|
Items Impacting EBITDA for the Three Months Ended June 30, 2026 and 2025
|
Exhibit 3
|
|
Three Months Ended June 30,
|
||||||||
|
2026
|
2025
|
|||||||
|
GAAP net (loss) income
|
$
|
(13,421,000
|
)
|
$
|
3,042,000
|
|||
|
Interest expense, net
|
12,044,000
|
12,812,000
|
||||||
|
Income tax expense
|
3,369,000
|
2,425,000
|
||||||
|
Depreciation and amortization
|
2,270,000
|
2,449,000
|
||||||
|
EBITDA
|
$
|
4,262,000
|
$
|
20,728,000
|
||||
|
Non-cash items impacting EBITDA
|
||||||||
|
Core and finished goods premium amortization
|
$
|
3,406,000
|
$
|
2,847,000
|
||||
|
Revaluation - cores on customers’ shelves
|
705,000
|
1,026,000
|
||||||
|
Share-based compensation expenses
|
2,138,000
|
946,000
|
||||||
|
Foreign exchange impact of lease liabilities and forward contracts
|
(1,597,000
|
)
|
(8,348,000
|
)
|
||||
|
Change in fair value of compound net derivative liability
|
1,540,000
|
1,790,000
|
||||||
|
Total non-cash items impacting EBITDA
|
$
|
6,192,000
|
$
|
(1,739,000
|
)
|
|||
|
Cash items impacting EBITDA
|
||||||||
|
Transition expenses and severance
|
3,014,000
|
-
|
||||||
|
Net tariff costs paid for products sold before price increases were effective
|
-
|
1,426,000
|
||||||
|
Total cash items impacting EBITDA
|
$
|
3,014,000
|
$
|
1,426,000
|
||||
|
Items Impacting Operating Income for the Three Months Ended June 30, 2026 and 2025
|
Exhibit 4
|
|
Three Months Ended June 30,
|
||||||||
|
2026
|
2025
|
|||||||
|
GAAP operating income
|
$
|
3,532,000
|
$
|
20,069,000
|
||||
|
Non-cash items impacting operating income
|
||||||||
|
Core and finished goods premium amortization
|
$
|
3,406,000
|
$
|
2,847,000
|
||||
|
Revaluation - cores on customers’ shelves
|
705,000
|
1,026,000
|
||||||
|
Share-based compensation expenses
|
2,138,000
|
946,000
|
||||||
|
Foreign exchange impact of lease liabilities and forward contracts
|
(1,597,000
|
)
|
(8,348,000
|
)
|
||||
|
Total non-cash items impacting operating income
|
$
|
4,652,000
|
$
|
(3,529,000
|
)
|
|||
|
Cash items impacting operating income
|
||||||||
|
Transition expenses and severance
|
3,014,000
|
-
|
||||||
|
Net tariff costs paid for products sold before price increases were effective
|
-
|
1,426,000
|
||||||
|
Total cash items impacting operating income
|
$
|
3,014,000
|
$
|
1,426,000
|
||||