Motorcar Parts Writes Off $84.7 MillionMonday, June 17, 2013
Motorcar Parts of America Inc.’s fiscal fourth quarter loss more than quadrupled as the company took an $84.7 million write-off of its failed acquisition of a Canadian parts maker.
But the Torrance parts company will get $30 million in tax advantages as a result of the breaking off the money-losing divisions.
Motorcar Parts, which rebuilds and sells alternators and starters, on Monday reported a net loss of $73.7 million (-$5.09 a share) for the quarter ended March 31, compared with a net loss of $12.9 million (-1.03) in the same period a year earlier. Net sales fell 12 percent to $89 million.
Toronto-based Fenwick Automotive Products Ltd., also known as Fenco, was broken off from Motorcar Parts. Fenco and its affiliates filed for Chapter 7 bankruptcy liquidation last week. Motorcar Parts, which bought Fenwick million in 2011 for $5 million in stock, took the $84.7 million non-cash charge for impairment and other intangible assets.
Excluding Fenco-related charges, Motorcar Parts’s non-GAAP adjusted net loss was $3.6 million (-26 cents), compared with a net loss of $4 million (-32 cents) in the same period a year earlier.
Chief Executive Selwyn Joffe said the company expects to reap $30 million in tax benefits from the Fenco losses.
Shares closed up 32 cents, or 4 percent, to $7.75 on the Nasdaq.