Motorcar Parts of America Reports Year-End Results
- Record Sales for the Fiscal Year; Operating Income Up Sharply; Solid Outlook with Strong Cash Flow
Key highlights for the fiscal year.
-
Net sales increased 5.1 percent to
$717.7 million . -
Gross profit increased 16.3 percent to
$132.6 million . - Gross margin increased 1.8 percentage points to 18.5 percent.
-
Operating income increased 26.5 percent to
$46.1 million . -
The company generated cash from operations of approximately
$39.2 million .
Fiscal 2024 Fourth Quarter Results
Net sales for the fiscal 2024 fourth quarter were
Gross profit for the fiscal 2024 fourth quarter was
Operating income for the fiscal 2024 fourth quarter was
Interest expense for the fiscal fourth quarter increased by
Net income for the fiscal 2024 fourth quarter was
“Our fiscal 2024 results indicate continued progress in growing sales, increasing gross margins and gross profit and generating positive cash flow, which we expect to continue in the new fiscal year. Our brake-related product categories continue to gain momentum, which will result in gross margin accretion. We remain focused on executing our strategic plans, supported by positive cash flow and neutralizing working capital,” said
Twelve-Month Results
Net sales for fiscal 2024 increased 5.1 percent to a record
Gross profit for fiscal 2024 increased 16.3 percent to
Operating income for fiscal 2024 increased 26.5 percent to
Interest expense for fiscal 2024 increased by
Due primarily to
The company generated approximately
Further Considerations
-
Sales volume improving:
- Ordering activity has gained momentum.
- Industry fundamentals are improving and will drive product demand.
-
Margin improvement:
- Enhanced by multiple rounds of price increases.
- Improving overhead absorption as brake-related business gains further momentum.
- Improving operational efficiencies through volume increases.
- Strong cash flow outlook.
Fiscal 2025 Guidance
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
Earnings Conference Call and Webcast
About
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
(Financial tables follow)
|
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||||||||||||||||
|
Consolidated Statements of Operations |
||||||||||||||||
|
|
|
|
|
|
||||||||||||
|
|
|
Three Months Ended
|
|
Year Ended
|
||||||||||||
|
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
|
|
|
(Unaudited) |
|
|
|
|
||||||||||
| Net sales |
$ |
189,478,000 |
|
$ |
194,727,000 |
|
$ |
717,684,000 |
|
$ |
683,074,000 |
|
||||
| Cost of goods sold |
|
154,685,000 |
|
|
158,576,000 |
|
|
585,133,000 |
|
|
569,112,000 |
|
||||
| Gross profit |
|
34,793,000 |
|
|
36,151,000 |
|
|
132,551,000 |
|
|
113,962,000 |
|
||||
| Operating expenses: | ||||||||||||||||
| General and administrative |
|
15,644,000 |
|
|
12,677,000 |
|
|
57,769,000 |
|
|
54,756,000 |
|
||||
| Sales and marketing |
|
5,443,000 |
|
|
4,487,000 |
|
|
22,481,000 |
|
|
21,729,000 |
|
||||
| Research and development |
|
2,643,000 |
|
|
1,992,000 |
|
|
9,995,000 |
|
|
10,322,000 |
|
||||
| Foreign exchange impact of lease liabilities and forward contracts |
|
(1,155,000 |
) |
|
(6,738,000 |
) |
|
(3,814,000 |
) |
|
(9,291,000 |
) |
||||
| Total operating expenses |
|
22,575,000 |
|
|
12,418,000 |
|
|
86,431,000 |
|
|
77,516,000 |
|
||||
| Operating income |
|
12,218,000 |
|
|
23,733,000 |
|
|
46,120,000 |
|
|
36,446,000 |
|
||||
| Other expenses: | ||||||||||||||||
| Interest expense, net |
|
14,640,000 |
|
|
11,880,000 |
|
|
60,040,000 |
|
|
39,555,000 |
|
||||
| Change in fair value of compound net derivative liability |
|
(2,710,000 |
) |
|
- |
|
|
(1,020,000 |
) |
|
- |
|
||||
| Loss on extinguishment of debt |
|
- |
|
|
- |
|
|
168,000 |
|
|
- |
|
||||
| Total other expenses |
|
11,930,000 |
|
|
11,880,000 |
|
|
59,188,000 |
|
|
39,555,000 |
|
||||
| Income (loss) before income tax (benefit) expense |
|
288,000 |
|
|
11,853,000 |
|
|
(13,068,000 |
) |
|
(3,109,000 |
) |
||||
| Income tax (benefit) expense |
|
(1,050,000 |
) |
|
10,394,000 |
|
|
36,176,000 |
|
|
1,098,000 |
|
||||
| Net income (loss) |
$ |
1,338,000 |
|
$ |
1,459,000 |
|
$ |
(49,244,000 |
) |
$ |
(4,207,000 |
) |
||||
| Basic net income (loss) per share |
$ |
0.07 |
|
$ |
0.07 |
|
$ |
(2.51 |
) |
$ |
(0.22 |
) |
||||
| Diluted net income (loss) per share |
$ |
(0.03 |
) |
$ |
0.07 |
|
$ |
(2.51 |
) |
$ |
(0.22 |
) |
||||
| Weighted average number of shares outstanding: | ||||||||||||||||
| Basic |
|
19,662,380 |
|
|
19,492,962 |
|
|
19,601,204 |
|
|
19,340,246 |
|
||||
| Diluted |
|
22,085,292 |
|
|
19,603,394 |
|
|
19,601,204 |
|
|
19,340,246 |
|
||||
|
|
||||||||
|
Consolidated Balance Sheets |
||||||||
|
|
|
|
|
|
||||
|
|
|
|
|
|
||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents |
$ |
13,974,000 |
|
$ |
11,596,000 |
|
||
| Short-term investments |
|
1,837,000 |
|
|
2,011,000 |
|
||
| Accounts receivable — net |
|
96,296,000 |
|
|
119,868,000 |
|
||
| Inventory — net |
|
377,040,000 |
|
|
339,675,000 |
|
||
| Inventory unreturned |
|
20,288,000 |
|
|
16,579,000 |
|
||
| Contract assets |
|
27,139,000 |
|
|
25,443,000 |
|
||
| Income tax receivable |
|
5,683,000 |
|
|
2,156,000 |
|
||
| Prepaid expenses and other current assets |
|
18,202,000 |
|
|
20,150,000 |
|
||
| Total current assets |
|
560,459,000 |
|
|
537,478,000 |
|
||
| Plant and equipment — net |
|
38,338,000 |
|
|
46,052,000 |
|
||
| Operating lease assets |
|
83,973,000 |
|
|
87,619,000 |
|
||
| Deferred income taxes |
|
2,976,000 |
|
|
32,625,000 |
|
||
| Long-term contract assets |
|
320,282,000 |
|
|
318,381,000 |
|
||
|
|
|
3,205,000 |
|
|
3,205,000 |
|
||
| Intangible assets — net |
|
1,069,000 |
|
|
2,143,000 |
|
||
| Other assets |
|
1,700,000 |
|
|
1,062,000 |
|
||
| TOTAL ASSETS |
$ |
1,012,002,000 |
|
$ |
1,028,565,000 |
|
||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable |
$ |
154,977,000 |
|
$ |
119,437,000 |
|
||
| Accrued liabilities |
|
30,205,000 |
|
|
22,329,000 |
|
||
| Customer finished goods returns accrual |
|
38,312,000 |
|
|
37,984,000 |
|
||
| Contract liabilities |
|
37,591,000 |
|
|
40,340,000 |
|
||
| Revolving loan |
|
128,000,000 |
|
|
145,200,000 |
|
||
| Other current liabilities |
|
7,021,000 |
|
|
4,871,000 |
|
||
| Operating lease liabilities |
|
8,319,000 |
|
|
8,767,000 |
|
||
| Current portion of term loan |
|
- |
|
|
3,664,000 |
|
||
| Total current liabilities |
|
404,425,000 |
|
|
382,592,000 |
|
||
| Term loan, less current portion |
|
- |
|
|
9,279,000 |
|
||
| Convertible notes, related party |
|
30,776,000 |
|
|
30,994,000 |
|
||
| Contract liabilities, less current portion |
|
212,068,000 |
|
|
193,606,000 |
|
||
| Deferred income taxes |
|
511,000 |
|
|
718,000 |
|
||
| Operating lease liabilities, less current portion |
|
72,240,000 |
|
|
79,318,000 |
|
||
| Other liabilities |
|
6,872,000 |
|
|
11,583,000 |
|
||
| Total liabilities |
|
726,892,000 |
|
|
708,090,000 |
|
||
| Commitments and contingencies | ||||||||
| Shareholders' equity: | ||||||||
| Preferred stock; par value |
|
- |
|
|
|
- |
|
|
| Series A junior participating preferred stock; par value |
|
- |
|
|
|
- |
|
|
| Common stock; par value |
|
197,000 |
|
|
195,000 |
|
||
| Additional paid-in capital |
|
236,255,000 |
|
|
231,836,000 |
|
||
| Retained earnings |
|
39,503,000 |
|
|
88,747,000 |
|
||
| Accumulated other comprehensive income (loss) |
|
9,155,000 |
|
|
(303,000 |
) |
||
| Total shareholders' equity |
|
285,110,000 |
|
|
320,475,000 |
|
||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
$ |
1,012,002,000 |
|
$ |
1,028,565,000 |
|
||
|
|
||||||||
Additional Information and Non-GAAP Financial Measures
To supplement the consolidated financial statements presented in accordance with
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 |
Exhibit 1 |
|||||||||||||||
|
Three Months Ended |
||||||||||||||||
|
2024 |
2023 |
|||||||||||||||
|
$ |
Per Share |
$ |
Per Share |
|||||||||||||
| GAAP net income |
$ |
1,338,000 |
|
$ |
(0.03 |
) |
$ |
1,459,000 |
|
$ |
0.07 |
|
||||
| Non-cash items impacting net income | ||||||||||||||||
| Core and finished goods premium amortization |
$ |
2,761,000 |
|
$ |
0.13 |
|
$ |
2,608,000 |
|
$ |
0.13 |
|
||||
| Revaluation - cores on customers' shelves |
|
973,000 |
|
|
0.04 |
|
|
1,032,000 |
|
|
0.05 |
|
||||
| Share-based compensation expenses |
|
432,000 |
|
|
0.02 |
|
|
1,164,000 |
|
|
0.06 |
|
||||
| Foreign exchange impact of lease liabilities and forward contracts |
|
(1,155,000 |
) |
|
(0.05 |
) |
|
(6,738,000 |
) |
|
(0.34 |
) |
||||
| Change in fair value of compound net derivative liability |
|
(2,710,000 |
) |
|
(0.12 |
) |
|
- |
|
|
- |
|
||||
| Tax effect (a) |
|
(75,000 |
) |
|
(0.00 |
) |
|
484,000 |
|
|
0.02 |
|
||||
| Tax valuation allowance |
|
548,000 |
|
|
0.02 |
|
|
- |
|
|
- |
|
||||
| Total non-cash items impacting net income |
$ |
774,000 |
|
$ |
0.04 |
|
$ |
(1,450,000 |
) |
$ |
(0.07 |
) |
||||
| Cash items impacting net income | ||||||||||||||||
| Supply chain disruptions and related costs (b) |
$ |
734,000 |
|
$ |
0.03 |
|
$ |
2,951,000 |
|
$ |
0.15 |
|
||||
| New product line start-up costs and transition expenses, and severance (c) |
|
840,000 |
|
|
0.04 |
|
|
923,000 |
|
|
0.05 |
|
||||
| Employee retention credit (d) |
|
- |
|
|
- |
|
|
(5,104,000 |
) |
|
(0.26 |
) |
||||
| Tax effect (a) |
|
(394,000 |
) |
|
(0.02 |
) |
|
308,000 |
|
|
0.02 |
|
||||
| Total cash items impacting net income |
$ |
1,180,000 |
|
$ |
0.05 |
|
$ |
(922,000 |
) |
$ |
(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 |
||
|
|
For the three-months ended |
||
|
(c) |
For the three-months ended |
||
|
|
For the three-months ended |
||
|
(d) |
For the three-months ended |
||
|
Items Impacting Net Income for the Twelve Months Ended |
Exhibit 2 |
|||||||||||||||
|
Twelve Months Ended |
||||||||||||||||
|
2024 |
|
2023 |
||||||||||||||
|
$ |
|
Per Share |
|
$ |
|
Per Share |
||||||||||
| GAAP net loss |
$ |
(49,244,000 |
) |
$ |
(2.51 |
) |
$ |
(4,207,000 |
) |
$ |
(0.22 |
) |
||||
| Non-cash items impacting net loss | ||||||||||||||||
| Core and finished goods premium amortization |
$ |
10,963,000 |
|
$ |
0.56 |
|
$ |
11,791,000 |
|
$ |
0.61 |
|
||||
| Revaluation - cores on customers' shelves |
|
5,353,000 |
|
|
0.27 |
|
|
3,736,000 |
|
|
0.19 |
|
||||
| Share-based compensation expenses |
|
4,700,000 |
|
|
0.24 |
|
|
4,685,000 |
|
|
0.24 |
|
||||
| Foreign exchange impact of lease liabilities and forward contracts |
|
(3,814,000 |
) |
|
(0.19 |
) |
|
(9,291,000 |
) |
|
(0.48 |
) |
||||
| Change in fair value of compound net derivative liability and loss on extinguishment of debt |
|
(852,000 |
) |
|
(0.04 |
) |
|
- |
|
|
- |
|
||||
| Tax effect (a) |
|
(4,088,000 |
) |
|
(0.21 |
) |
|
(2,730,000 |
) |
|
(0.14 |
) |
||||
| Tax valuation allowance |
|
38,009,000 |
|
|
1.94 |
|
|
- |
|
|
- |
|
||||
| Total non-cash items impacting net loss |
$ |
50,271,000 |
|
$ |
2.56 |
|
$ |
8,191,000 |
|
$ |
0.42 |
|
||||
| Cash items impacting net loss | ||||||||||||||||
| Supply chain disruptions and related costs (b) |
$ |
7,472,000 |
|
$ |
0.38 |
|
$ |
12,914,000 |
|
$ |
0.67 |
|
||||
| New product line start-up costs and transition expenses, and severance (c) |
|
1,820,000 |
|
|
0.09 |
|
|
3,565,000 |
|
|
0.18 |
|
||||
| Employee retention credit (d) |
|
- |
|
|
- |
|
|
(5,104,000 |
) |
|
(0.26 |
) |
||||
| Tax effect (a) |
|
(2,323,000 |
) |
|
(0.12 |
) |
|
(2,844,000 |
) |
|
(0.15 |
) |
||||
| Total cash items impacting net loss |
$ |
6,969,000 |
|
$ |
0.36 |
|
$ |
8,531,000 |
|
$ |
0.44 |
|
||||
|
(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 twelve-months ended |
||
|
|
For the twelve-months ended |
||
|
(c) |
For the twelve-months ended |
||
|
|
For the twelve-months ended |
||
|
(d) |
For the twelve-months ended |
||
|
Items Impacting Gross Profit for the Three Months Ended |
Exhibit 3 |
|||||||||||||
|
Three Months Ended |
||||||||||||||
|
2024 |
|
2023 |
||||||||||||
|
$ |
|
Gross Margin |
|
$ |
|
Gross Margin |
||||||||
| GAAP gross profit |
$ |
34,793,000 |
|
18.4 |
% |
$ |
36,151,000 |
|
18.6 |
% |
||||
| Non-cash items impacting gross profit | ||||||||||||||
| Core and finished goods premium amortization |
$ |
2,761,000 |
|
1.5 |
% |
$ |
2,608,000 |
|
1.3 |
% |
||||
| Revaluation - cores on customers' shelves |
|
973,000 |
|
0.5 |
% |
|
1,032,000 |
|
0.5 |
% |
||||
| Total non-cash items impacting gross profit |
$ |
3,734,000 |
|
2.0 |
% |
$ |
3,640,000 |
|
1.9 |
% |
||||
| Cash items impacting gross profit | ||||||||||||||
| Supply chain disruptions and related costs |
$ |
734,000 |
|
0.4 |
% |
$ |
2,913,000 |
|
1.5 |
% |
||||
| Employee retention credit |
|
- |
|
- |
|
|
(2,034,000 |
) |
-1.0 |
% |
||||
| Total cash items impacting gross profit |
$ |
734,000 |
|
0.4 |
% |
$ |
879,000 |
|
0.5 |
% |
||||
|
Items Impacting Gross Profit for the Twelve Months Ended |
Exhibit 4 |
|||||||||||||
|
Twelve Months Ended |
||||||||||||||
|
2024 |
|
2023 |
||||||||||||
|
$ |
|
Gross Margin |
|
$ |
|
Gross Margin |
||||||||
| GAAP gross profit |
$ |
132,551,000 |
|
18.5 |
% |
$ |
113,962,000 |
|
16.7 |
% |
||||
| Non-cash items impacting gross profit | ||||||||||||||
| Core and finished goods premium amortization |
$ |
10,963,000 |
|
1.5 |
% |
$ |
11,791,000 |
|
1.7 |
% |
||||
| Revaluation - cores on customers' shelves |
|
5,353,000 |
|
0.7 |
% |
|
3,736,000 |
|
0.5 |
% |
||||
| Total non-cash items impacting gross profit |
$ |
16,316,000 |
|
2.3 |
% |
$ |
15,527,000 |
|
2.3 |
% |
||||
| Cash items impacting gross profit | ||||||||||||||
| Supply chain disruptions and related costs |
$ |
7,472,000 |
|
1.0 |
% |
$ |
11,485,000 |
|
1.7 |
% |
||||
| Employee retention credit |
|
- |
|
- |
|
|
(2,034,000 |
) |
-0.3 |
% |
||||
| Total cash items impacting gross profit |
$ |
7,472,000 |
|
1.0 |
% |
$ |
9,451,000 |
|
1.4 |
% |
||||
|
Items Impacting EBITDA for the Three and Twelve Months Ended |
Exhibit 5 |
|||||||||||||||
|
Three Months Ended
|
|
Twelve Months Ended
|
||||||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||||
| GAAP net income (loss) |
$ |
1,338,000 |
|
$ |
1,459,000 |
|
$ |
(49,244,000 |
) |
$ |
(4,207,000 |
) |
||||
| Interest expense, net |
|
14,640,000 |
|
|
11,880,000 |
|
|
60,040,000 |
|
|
39,555,000 |
|
||||
| Income tax expense (benefit) |
|
(1,050,000 |
) |
|
10,394,000 |
|
|
36,176,000 |
|
|
1,098,000 |
|
||||
| Depreciation and amortization |
|
2,775,000 |
|
|
3,122,000 |
|
|
11,619,000 |
|
|
12,444,000 |
|
||||
| EBITDA |
$ |
17,703,000 |
|
$ |
26,855,000 |
|
$ |
58,591,000 |
|
$ |
48,890,000 |
|
||||
| Non-cash items impacting EBITDA | ||||||||||||||||
| Core and finished goods premium amortization |
$ |
2,761,000 |
|
$ |
2,608,000 |
|
$ |
10,963,000 |
|
$ |
11,791,000 |
|
||||
| Revaluation - cores on customers' shelves |
|
973,000 |
|
|
1,032,000 |
|
|
5,353,000 |
|
|
3,736,000 |
|
||||
| Share-based compensation expenses |
|
432,000 |
|
|
1,164,000 |
|
|
4,700,000 |
|
|
4,685,000 |
|
||||
| Foreign exchange impact of lease liabilities and forward contracts |
|
(1,155,000 |
) |
|
(6,738,000 |
) |
|
(3,814,000 |
) |
|
(9,291,000 |
) |
||||
| Change in fair value of compound net derivative liability and loss on extinguishment of debt |
|
(2,710,000 |
) |
|
- |
|
|
(852,000 |
) |
|
- |
|
||||
| Total non-cash items impacting EBITDA |
$ |
301,000 |
|
$ |
(1,934,000 |
) |
$ |
16,350,000 |
|
$ |
10,921,000 |
|
||||
| Cash items impacting EBITDA | ||||||||||||||||
| Supply chain disruptions and related costs |
$ |
734,000 |
|
$ |
2,951,000 |
|
$ |
7,472,000 |
|
$ |
12,914,000 |
|
||||
| New product line start-up costs and transition expenses, and severance |
|
840,000 |
|
|
923,000 |
|
|
1,820,000 |
|
|
3,565,000 |
|
||||
| Employee retention credit |
|
- |
|
|
(5,104,000 |
) |
|
- |
|
|
(5,104,000 |
) |
||||
| Total cash items impacting EBITDA |
$ |
1,574,000 |
|
$ |
(1,230,000 |
) |
$ |
9,292,000 |
|
$ |
11,375,000 |
|
||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20240611899769/en/
Vice President,
(310) 972-5124
Source:
