Business Wire | Jun 14, 2021 08:00AM EDT

Motorcar Parts of America Reports Fiscal 2021 Fourth Quarter and Year-End Results

Jun. 14, 2021

LOS ANGELES--(BUSINESS WIRE)--Jun. 14, 2021--Motorcar Parts of America, Inc. (Nasdaq: MPAA) today reported results for its fiscal 2021 fourth quarter and year ended March 31, 2021 - reflecting record sales for the quarter and fiscal year with strong profitability.

Fiscal 2021 Fourth Quarter Results

Net sales for the fiscal 2021 fourth quarter increased 11.5 percent to a record $168.1 million from $150.7 million, which was a record a year ago.

Net income for the fiscal 2021 fourth quarter was $835,000, or $0.04 per diluted share, compared with a net loss of $8.2 million, or $0.43 per share, a year ago. Details of items impacting net income are shown in Exhibit 1.

"Despite the significant impact of the COVID-19 global pandemic, we achieved record sales and strong profitability for the fourth quarter and for fiscal 2021. The company is well-positioned across multiple non-discretionary product lines and we remain focused on leveraging our strength as consumer demand for automotive aftermarket parts continues to gain momentum. This is supported by vaccination availability, a return to more normal patterns in our daily lives and strong demand for used vehicles," said Selwyn Joffe, chairman, president and chief executive officer of Motorcar Parts of America.

"In addition, as the electric vehicle market evolves, we anticipate increasing demand for the technology offered by our wholly owned D&V subsidiary - benefitting from our ability to support the development of the electric vehicle, including battery power emulation, and the testing and development of inverters, electric motors, and high-speed battery-charging station applications," Joffe added.

Results for the fiscal fourth quarter were impacted by COVID-19 expenses related to safety, health initiatives and incrementally higher freight costs, reflecting approximately $2.8 million on a pre-tax basis, or $0.11 per share on a tax-effected basis, for cost of goods sold and operating expenses. Approximately $603,000 of the $2.8 million was due to incremental bonuses and wages paid to the company's dedicated operating employees on the front line. The balance reflects costs for personal protection equipment (PPE), social distancing initiatives and higher freight costs.

Net cash used in operating activities was $16.4 million for the fiscal 2021 fourth quarter and net debt was $88.9 million at March 31, 2021 compared with $67.6 million at December 31, 2020, reflecting working capital requirements to support the record sales and inventory increases for anticipated business growth in fiscal 2022.

Gross profit for the fiscal 2021 fourth quarter was $32.1 million compared with $36.6 million a year earlier. Gross profit as a percentage of net sales for the fiscal 2021 fourth quarter was 19.1 percent compared with 24.3 percent a year earlier. Gross margin was primarily impacted by brake caliper start-up costs and other product relocation expenses related to the expansion in Mexico, both of which are now nearing completion; higher costs related to COVID-19; and other items, including non-cash and non-economic expenses totaling 6.4 percent as detailed in Exhibit 3 of the press release.

Fiscal 2021 Full-Year Results

Net sales for fiscal 2021 were $540.8 million compared with $535.8 million a year earlier, impacted by the sharp drop in demand in April due to the global pandemic. In addition, net sales were impacted by current pandemic supply chain challenges in the third and fourth quarters. This was partially offset by the benefit of $12.8 million due to a realignment of inventory at two customer distribution centers with expected future sales benefits as product mix changes.

Net income for fiscal 2021 was $21.5 million, or $1.11 per diluted share, compared with a net loss of $7.3 million, or $0.39 per share, a year ago. Details of items impacting net income are shown in Exhibit 2.

Net cash generated from operating activities was $56.1 million during the year ended March 31, 2021, and net debt was reduced to $88.9 million at March 31, 2021 from $126.5 million at March 31, 2020.

Gross profit for fiscal 2021 was $109.5 million compared with $118.4 million a year earlier. Gross profit as a percentage of net sales for fiscal 2021 was 20.2 percent compared with 22.1 percent a year earlier. Gross margin was primarily impacted by brake caliper start-up costs and other product relocation expenses related to the expansion in Mexico, both of which are now nearing completion; higher costs related to COVID-19; and other items, including non-cash and non-economic expenses totaling 5.5 percent as detailed in Exhibit 4 of the press release.

FISCAL 2022 OUTLOOK

"Given the ongoing global pandemic and near-term related considerations, the company believes it is still not prudent at this time to provide specific annual sales and gross margin guidance. We will reevaluate this policy as fiscal 2022 evolves. However, we are encouraged by continued strong customer demand for our aftermarket parts.

"As I stated since the beginning of the global pandemic, our industry and our company are resilient and we are continuing to execute our strategic plans for growth and profitability. We are guardedly optimistic about the near and long-term opportunities as an essential supplier in the $125 billion hard parts industry and an evolving provider to the fast-growing electric vehicle and aerospace markets," Joffe said.

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 reconciliation of EBITDA to its 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 measures.

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 (833)-968-1924 (domestic) or (825)-312-2355 (international). For those who are not available to listen to the live broadcast, the call will be archived 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, 2021 through 8:59 p.m. Pacific time on June 21, 2021 by calling (800)-585-8367 (domestic) or (416)-621-4642 (international) and using access code: 1085627.

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 master cylinders, brake power boosters, turbochargers, 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.

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 2021 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 Operations

Three Months Ended March 31, Year Ended March 31,

2021 2020 2021 2020

(Unaudited) Net sales $ 168,128,000 $ 150,735,000 $ 540,782,000 $ 535,831,000

Cost of goods 136,021,000 114,152,000 431,321,000 417,431,000 soldGross profit 32,107,000 36,583,000 109,461,000 118,400,000

Operatingexpenses:General and 15,637,000 13,814,000 53,847,000 53,224,000 administrativeSales and 4,800,000 5,047,000 18,024,000 21,037,000 marketingResearch and 2,549,000 2,506,000 8,563,000 9,200,000 developmentForeignexchangeimpact of 3,651,000 20,708,000 (17,606,000 ) 18,201,000 leaseliabilitiesand forwardcontractsTotal 26,637,000 42,075,000 62,828,000 101,662,000 operatingexpensesOperating 5,470,000 (5,492,000 ) 46,633,000 16,738,000 income (loss)Interest 3,696,000 5,464,000 15,770,000 25,039,000 expense, netIncome (loss)before income 1,774,000 (10,956,000 ) 30,863,000 (8,301,000 )tax expense(benefit)Income tax 939,000 (2,763,000 ) 9,387,000 (1,011,000 )expense(benefit)Net income $ 835,000 $ (8,193,000 ) $ 21,476,000 $ (7,290,000 )(loss)Basic net $ 0.04 $ (0.43 ) $ 1.13 $ (0.39 )income (loss)per shareDiluted net $ 0.04 $ (0.43 ) $ 1.11 $ (0.39 )income (loss)per shareWeightedaverage numberof sharesoutstanding:Basic 19,044,407 18,967,865 19,023,145 18,913,788

Diluted 19,585,638 18,967,865 19,387,555 18,913,788

MOTORCAR PARTS OF AMERICA, INC. AND SUBSIDIARIESConsolidated Balance SheetsMarch 31,2021March 31,2020ASSETSCurrent assets:Cash and cash equivalents$

15,523,000

$

49,616,000

Short-term investments1,652,000

850,000

Accounts receivable - net63,122,000

91,748,000

Inventory - net288,361,000

225,659,000

Inventory unreturned14,552,000

9,021,000

Contract assets26,940,000

20,332,000

Income tax receivable405,000

3,282,000

Prepaid expenses and other current assets12,301,000

8,608,000

Total current assets422,856,000

409,116,000

Plant and equipment - net53,854,000

44,957,000

Operating lease assets71,513,000

53,029,000

Deferred income taxes19,381,000

18,950,000

Long-term contract assets270,213,000

239,540,000

Goodwill3,205,000

3,205,000

Intangible assets - net5,329,000

6,393,000

Other assets1,531,000

1,839,000

TOTAL ASSETS$

847,882,000

$

777,029,000

LIABILITIES AND SHAREHOLDERS' EQUITYCurrent liabilities:Accounts payable$

129,331,000

$

78,664,000

Accrued liabilities23,404,000

16,419,000

Customer finished goods returns accrual31,524,000

25,326,000

Contract liabilities41,072,000

27,911,000

Revolving loan84,000,000

152,000,000

Other current liabilities6,683,000

9,390,000

Operating lease liabilities6,439,000

5,104,000

Current portion of term loan3,678,000

3,678,000

Total current liabilities326,131,000

318,492,000

Term loan, less current portion16,786,000

20,462,000

Contract liabilities, less current portion125,223,000

92,101,000

Deferred income taxes73,000

79,000

Operating lease liabilities, less current portion70,551,000

61,425,000

Other liabilities7,973,000

8,950,000

Total liabilities546,737,000

501,509,000

Commitments and contingenciesShareholders' 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;19,045,386 and 18,969,380 shares issued and outstanding at March 31, 2021 and-

-

2020, respectively190,000

190,000

Additional paid-in capital223,058,000

218,581,000

Retained earnings85,593,000

64,117,000

Accumulated other comprehensive loss(7,696,000

)

(7,368,000

)

Total shareholders' equity301,145,000

275,520,000

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY$

847,882,000

$

777,029,000

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 and years ended March 31, 2021 and 2020. 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.

MOTORCAR PARTS OF AMERICA, INC. AND SUBSIDIARIESConsolidated Balance Sheets March 31, March 31, 2021 2020ASSETSCurrent assets:Cash and cash equivalents $ 15,523,000 $ 49,616,000

Short-term investments 1,652,000 850,000

Accounts receivable - net 63,122,000 91,748,000

Inventory - net 288,361,000 225,659,000

Inventory unreturned 14,552,000 9,021,000

Contract assets 26,940,000 20,332,000

Income tax receivable 405,000 3,282,000

Prepaid expenses and other current assets 12,301,000 8,608,000

Total current assets 422,856,000 409,116,000

Plant and equipment - net 53,854,000 44,957,000

Operating lease assets 71,513,000 53,029,000

Deferred income taxes 19,381,000 18,950,000

Long-term contract assets 270,213,000 239,540,000

Goodwill 3,205,000 3,205,000

Intangible assets - net 5,329,000 6,393,000

Other assets 1,531,000 1,839,000

TOTAL ASSETS $ 847,882,000 $ 777,029,000

LIABILITIES AND SHAREHOLDERS' EQUITYCurrent liabilities:Accounts payable $ 129,331,000 $ 78,664,000

Accrued liabilities 23,404,000 16,419,000

Customer finished goods returns accrual 31,524,000 25,326,000

Contract liabilities 41,072,000 27,911,000

Revolving loan 84,000,000 152,000,000

Other current liabilities 6,683,000 9,390,000

Operating lease liabilities 6,439,000 5,104,000

Current portion of term loan 3,678,000 3,678,000

Total current liabilities 326,131,000 318,492,000

Term loan, less current portion 16,786,000 20,462,000

Contract liabilities, less current portion 125,223,000 92,101,000

Deferred income taxes 73,000 79,000

Operating lease liabilities, less current 70,551,000 61,425,000 portionOther liabilities 7,973,000 8,950,000

Total liabilities 546,737,000 501,509,000

Commitments and contingenciesShareholders' equity:Preferred stock; par value $.01 per share, - - 5,000,000 shares authorized; none issuedSeries A junior participating preferredstock; par value $.01 per share,20,000 shares authorized; none issued - -

Common stock; par value $.01 per share,50,000,000 shares authorized;19,045,386 and 18,969,380 shares issued and - - outstanding at March 31, 2021 and2020, respectively 190,000 190,000

Additional paid-in capital 223,058,000 218,581,000

Retained earnings 85,593,000 64,117,000

Accumulated other comprehensive loss (7,696,000 ) (7,368,000 )

Total shareholders' equity 301,145,000 275,520,000

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 847,882,000 $ 777,029,000

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 and years ended March 31, 2021 and 2020. 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 NetIncome (Loss) for theThree Months Ended Exhibit 1March 31, 2021 and2020

Three Months Ended March 31,

2021 2020

$ Per Share $ Per Share

GAAP net income (loss) $ 835,000 $ 0.04 $ 8,193,000 ) $ (0.43 )

Items impacting netincome (loss)Customer allowances $ 101,000 $ 0.01 $ (54,000 ) $ (0.00 )related to newbusinessCore premium 2,321,000 0.12 958,000 0.05 amortization impactingnet salesImpact of tariffs 306,000 0.02 - -

New product linestart-up costs and 5,203,000 0.27 2,816,000 0.15 transition expenses(a)Revaluation - cores on 1,020,000 0.05 932,000 0.05 customers' shelvesIncreased expenses 2,825,000 0.14 - - related to COVID-19(b)Earn-out accruals and 1,372,000 0.07 (553,000 ) (0.03 )severanceShare-based 1,488,000 0.08 1,029,000 0.05 compensation expensesForeign exchangeimpact of lease 3,651,000 0.19 20,708,000 1.09 liabilities andforward contractsTax effect (c) (4,572,000 ) (0.23 ) (6,459,000 ) (0.34 )

Total items impacting $ 13,715,000 $ 0.70 $ 19,377,000 $ 1.02 net income (loss)(a)

Consists of $4,781,000 included in cost of goods sold and $422,000 included in operating expenses for the three months ended March 31, 2021 and $2,508,000 included in cost of goods sold and $308,000 included in operating expenses for the three months ended March 31, 2020.

(b)

Consists of higher freight costs of $1,462,000 and expenses of $843,000 included in cost of goods sold and $520,000 included in operating expenses due to COVID-19 for the three months ended March 31, 2021.

(c)

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.

Consists of $4,781,000 included in cost of goods sold and $422,000(a) included in operating expenses for the three months ended March 31, 2021 and $2,508,000 included in cost of goods sold and $308,000 included in operating expenses for the three months ended March 31, 2020.

Consists of higher freight costs of $1,462,000 and expenses of $843,000(b) included in cost of goods sold and $520,000 included in operating expenses due to COVID-19 for the three months ended March 31, 2021.

Tax effect is calculated by applying an income tax rate of 25.0% to items(c) listed above; this rate may differ from the period's actual income tax rate.

Items Impacting Net Income (Loss) for the Years Ended March 31, 2021 and 2020

Exhibit 2

Year Ended March 31,

2021

2020

$

Per Share

$

Per Share

GAAP net income (loss)$

21,476,000

$

1.11

$

(7,290,000

)

$

(0.39

)

Items impacting net income (loss)Customer allowances, return accruals and changeover costs (a) related to new business, net of costs$

408,000

$

0.02

$

1,177,000

$

0.06

Core premium amortization impacting net sales6,590,000

0.34

4,501,000

0.24

Impact of tariffs(3,229,000

)

(0.17

)

1,067,000

0.06

Cost in connection with a cancelled contract-

-

133,000

0.01

New product line start-up costs and transition expenses (b)17,767,000

0.92

10,281,000

0.54

Revaluation - cores on customers' shelves, and gain due to realignment of inventory at two customer distribution centers209,000

0.01

10,799,000

0.57

Increased expenses related to COVID-19 (c)9,101,000

0.47

-

-

Acquisition costs, earn-out accruals, severance and restatement-related fees1,391,000

0.07

(261,000

)

(0.01

)

Share-based compensation expenses5,247,000

0.27

4,141,000

0.22

Foreign exchange impact of lease liabilities and forward contracts(17,606,000

)

(0.91

)

18,201,000

0.96

Tax effect (d)(4,970,000

)

(0.26

)

(12,510,000

)

(0.66

)

Total items impacting net income (loss)$

14,908,000

$

0.77

$

37,529,000

$

1.98

Items Impacting NetIncome (Loss) forthe Years Ended Exhibit 2March 31, 2021 and2020

Year Ended March 31,

2021 2020

$ Per Share $ Per Share

GAAP net income $ 21,476,000 $ 1.11 $ (7,290,000 ) $ (0.39 )(loss) Items impacting netincome (loss)Customer allowances,return accruals andchangeover costs (a) $ 408,000 $ 0.02 $ 1,177,000 $ 0.06 related to newbusiness, net ofcostsCore premium 6,590,000 0.34 4,501,000 0.24 amortizationimpacting net salesImpact of tariffs (3,229,000 ) (0.17 ) 1,067,000 0.06

Cost in connection - - 133,000 0.01 with a cancelledcontractNew product linestart-up costs and 17,767,000 0.92 10,281,000 0.54 transition expenses(b)Revaluation - coreson customers'shelves, and gain 209,000 0.01 10,799,000 0.57 due to realignmentof inventory at twocustomerdistribution centersIncreased expenses 9,101,000 0.47 - - related to COVID-19(c)Acquisition costs,earn-out accruals, 1,391,000 0.07 (261,000 ) (0.01 )severance andrestatement-relatedfeesShare-based 5,247,000 0.27 4,141,000 0.22 compensationexpensesForeign exchangeimpact of lease (17,606,000 ) (0.91 ) 18,201,000 0.96 liabilities andforward contractsTax effect (d) (4,970,000 ) (0.26 ) (12,510,000 ) (0.66 )

Total items $ 14,908,000 $ 0.77 $ 37,529,000 $ 1.98 impacting net income(loss)(a)

Includes changeover costs related to new business of $112,000 recorded in operating expenses for the year ended March 31, 2020.

(b)

Consists of $16,353,000 included in cost of goods sold and $1,414,000 included in operating expenses for the year ended March 31, 2021 and $8,337,000 included in cost of goods sold and $1,944,000 included in operating expenses for the year ended March 31, 2020.

(c)

Consists of higher freight costs of $1,785,000 and expenses of $5,268,000 included in cost of goods sold and $2,048,000 included in operating expenses due to COVID-19 for the year ended March 31, 2021.

(d)

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.

(a) Includes changeover costs related to new business of $112,000 recorded in operating expenses for the year ended March 31, 2020.

Consists of $16,353,000 included in cost of goods sold and $1,414,000(b) included in operating expenses for the year ended March 31, 2021 and $8,337,000 included in cost of goods sold and $1,944,000 included in operating expenses for the year ended March 31, 2020.

Consists of higher freight costs of $1,785,000 and expenses of $5,268,000(c) included in cost of goods sold and $2,048,000 included in operating expenses due to COVID-19 for the year ended March 31, 2021.

Tax effect is calculated by applying an income tax rate of 25.0% to items(d) listed above; this rate may differ from the period's actual income tax rate.

Items Impacting Gross Profit for the Three Months Ended March 31, 2021 and 2020

Exhibit 3

Three Months Ended March 31,

2021

2020

$

Gross Margin

$

Gross Margin

GAAP gross profit$

32,107,000

19.1

%

$

36,583,000

24.3

%

Items impacting gross profitCustomer allowances related to new business$

101,000

0.1

%

$

(54,000

)

0.0

%

Core premium amortization impacting net sales2,321,000

1.4

%

958,000

0.6

%

Impact of tariffs306,000

0.2

%

-

-

New product line start-up costs and transition expenses4,781,000

2.8

%

2,508,000

1.7

%

Revaluation - cores on customers' shelves1,020,000

0.6

%

932,000

0.6

%

Increased expenses related to COVID-192,305,000

1.4

%

-

-

Total items impacting gross profit$

10,834,000

6.4

%

$

4,344,000

2.9

%

Items Impacting Gross Profitfor the Three Months Ended Exhibit 3March 31, 2021 and 2020

Three Months Ended March 31,

2021 2020

$ Gross $ Gross Margin Margin

GAAP gross profit $ 32,107,000 19.1 % $ 36,583,000 24.3 %

Items impacting gross profitCustomer allowances related to $ 101,000 0.1 % $ (54,000 ) 0.0 %new businessCore premium amortization 2,321,000 1.4 % 958,000 0.6 %impacting net salesImpact of tariffs 306,000 0.2 % - -

New product line start-up 4,781,000 2.8 % 2,508,000 1.7 %costs and transition expensesRevaluation - cores on 1,020,000 0.6 % 932,000 0.6 %customers' shelvesIncreased expenses related to 2,305,000 1.4 % - - COVID-19Total items impacting gross $ 10,834,000 6.4 % $ 4,344,000 2.9 %profitItems Impacting Gross Profit for the Years Ended March 31, 2021 and 2020

Exhibit 4

Year Ended March 31,

2021

2020

$

Gross Margin

$

Gross Margin

GAAP gross profit$

109,461,000

20.2

%

$

118,400,000

22.1

%

Items impacting gross profitCustomer allowances and return accruals related to new business, net of costs$

408,000

0.1

%

$

1,065,000

0.2

%

Core premium amortization impacting net sales6,590,000

1.2

%

4,501,000

0.8

%

Impact of tariffs(3,229,000

)

-0.6

%

1,067,000

0.2

%

Cost in connection with a cancelled contract-

-

133,000

0.0

%

New product line start-up costs and transition expenses?16,353,000

3.0

%

8,337,000

1.6

%

Revaluation - cores on customers' shelves, and gain due to realignment of inventory at two customer distribution centers (a)209,000

0.5

%

10,799,000

2.0

%

Increased expenses related to COVID-197,053,000

1.3

%

-

-

Total items impacting gross profit$

27,384,000

5.5

%

$

25,902,000

4.8

%

Items Impacting Gross Profitfor the Years Ended March Exhibit 431, 2021 and 2020

Year Ended March 31,

2021 2020

$ Gross $ Gross Margin Margin

GAAP gross profit $ 109,461,000 20.2 % $ 118,400,000 22.1 %

Items impacting gross profitCustomer allowances and $ 408,000 0.1 % $ 1,065,000 0.2 %return accruals related tonew business, net of costsCore premium amortization 6,590,000 1.2 % 4,501,000 0.8 %impacting net salesImpact of tariffs (3,229,000 ) -0.6 % 1,067,000 0.2 %

Cost in connection with a - - 133,000 0.0 %cancelled contractNew product line start-up 16,353,000 3.0 % 8,337,000 1.6 %costs and transitionexpenses?Revaluation - cores oncustomers' shelves, and gain 209,000 0.5 % 10,799,000 2.0 %due to realignment ofinventory at two customerdistribution centers (a)Increased expenses related 7,053,000 1.3 % - - to COVID-19Total items impacting gross $ 27,384,000 5.5 % $ 25,902,000 4.8 %profit(a)

Gross profit and gross margin impact to net sales and cost of goods sold

(a) Gross profit and gross margin impact to net sales and cost of goods sold

Items ImpactingEBITDA for theThree Months and Exhibit 5Years Ended March31, 2021 and 2020

Three Months Ended March 31, Year Ended March 31,

2021 2020 2021 2020

GAAP net income $ 835,000 $ (8,193,000 ) $ 21,476,000 $ (7,290,000 )(loss)Interest expense, 3,696,000 5,464,000 15,770,000 25,039,000 netIncome tax expense 939,000 (2,763,000 ) 9,387,000 (1,011,000 )(benefit)Depreciation and 3,054,000 2,542,000 11,144,000 9,561,000 amortizationEBITDA $ 8,524,000 $ (2,950,000 ) $ 57,777,000 $ 26,299,000

Items impactingEBITDACustomerallowances, returnaccruals and $ 101,000 $ (54,000 ) $ 408,000 $ 1,177,000 changeover costsrelated to newbusiness, net ofcostsCore premium 2,321,000 958,000 6,590,000 4,501,000 amortizationimpacting net salesImpact of tariffs 306,000 - (3,229,000 ) 1,067,000

Cost in connection - - - 133,000 with a cancelledcontractNew product linestart-up costs and 4,969,000 2,752,000 17,204,000 9,998,000 transition expenses(a)Revaluation - coreson customers'shelves, and gaindue to realignment 1,020,000 932,000 209,000 10,799,000 of inventory at twocustomerdistributioncentersIncreased expenses 2,825,000 - 9,101,000 - related to COVID-19Acquisition costs,earn-out accruals, 1,372,000 (553,000 ) 1,391,000 (261,000 )severance andrestatement-relatedfeesShare-based 1,488,000 1,029,000 5,247,000 4,141,000 compensationexpensesForeign exchangeimpact of lease 3,651,000 20,708,000 (17,606,000 ) 18,201,000 liabilities andforward contractsTotal items $ 18,053,000 $ 25,772,000 $ 19,315,000 $ 49,756,000 impacting EBITDA(a)

Excludes depreciation, which is included in the depreciation and amortization line item.

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CONTACT: Gary S. Maier (310) 972-5124