Motorcar Parts of America Reports Fiscal First Quarter Results
- Record Sales and Gross Profit with Solid Cash Flow Generation -
Key highlights for the quarter:
-
Net sales increased 10.9 percent to a first quarter record of
$188.4 million . -
Gross profit increased 16.3 percent to a first quarter record of
$33.9 million . -
Operating income increased to
$20.1 million from an operating loss of$6.5 million in the prior year. -
Generated
$10.0 million of cash from operating activities and reduced net bank debt by$7.0 million to$74.4 million . -
Repurchased 197,796 shares for
$2.0 million at an average price of$9.94 .
Fiscal 2026 First Quarter Results
Net sales for the fiscal 2026 first quarter increased 10.9 percent to a first quarter record of
Gross profit for the quarter increased 16.3 percent to a first quarter record of
Operating income for the fiscal 2026 first quarter increased to
Interest expense for the fiscal 2026 first quarter decreased by
Net income for the fiscal 2026 first quarter was
“We are pleased with our record first quarter results following a strong fiscal 2025 year. We remain focused on enhancing our supply chain and operating efficiencies as we continue to capitalize on the company’s prominent position within the non-discretionary automotive aftermarket business,” said
He noted favorable industry dynamics continue to drive the automotive aftermarket, including the increasing year-over-year number of vehicles on the road, coupled with an aging car parc climbing to a current 12.8 years in
Joffe emphasized that the company is continuing to work with its suppliers and customers to gain further efficiencies in our operations and supply chain. “The company’s solid financial position and cash flow generation support our competitive position and expectations for future growth,” Joffe said
He noted that the company has been proactively focused on significantly reducing reliance on Chinese suppliers for several years, which today represents less than 25 percent of parts and components sourced from
Joffe highlighted that the company generated cash of approximately
Share Repurchase
During the fiscal 2026 first quarter, the company repurchased 197,796 shares for
Fiscal 2026 Guidance Update
The company has increased its fiscal 2026 sales guidance since issuing annual guidance in June. This increase reflects a strong start to its fiscal year and incorporates the impact of tariff passthroughs. The company’s increased sales guidance is now between
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
|
|
||||||||
| Three Months Ended | ||||||||
|
|
||||||||
|
|
2025 |
|
|
2024 |
|
|||
| Net sales |
$ |
188,364,000 |
|
$ |
169,887,000 |
|
||
| Cost of goods sold |
|
154,447,000 |
|
|
140,713,000 |
|
||
| Gross profit |
|
33,917,000 |
|
|
29,174,000 |
|
||
| Operating expenses: | ||||||||
| General and administrative |
|
12,680,000 |
|
|
16,670,000 |
|
||
| Sales and marketing |
|
6,210,000 |
|
|
5,449,000 |
|
||
| Research and development |
|
3,306,000 |
|
|
2,433,000 |
|
||
| Foreign exchange impact of lease liabilities and forward contracts |
|
(8,348,000 |
) |
|
11,078,000 |
|
||
| Total operating expenses |
|
13,848,000 |
|
|
35,630,000 |
|
||
| Operating income (loss) |
|
20,069,000 |
|
|
(6,456,000 |
) |
||
| Other expenses: | ||||||||
| Interest expense, net |
|
12,812,000 |
|
|
14,387,000 |
|
||
| Change in fair value of compound net derivative liability |
|
1,790,000 |
|
|
(2,580,000 |
) |
||
| Total other expenses |
|
14,602,000 |
|
|
11,807,000 |
|
||
| Income (loss) before income tax expense (benefit) |
|
5,467,000 |
|
|
(18,263,000 |
) |
||
| Income tax expense (benefit) |
|
2,425,000 |
|
|
(178,000 |
) |
||
| Net income (loss) |
$ |
3,042,000 |
|
$ |
(18,085,000 |
) |
||
| Basic net income (loss) per share |
$ |
0.16 |
|
$ |
(0.92 |
) |
||
| Diluted net income (loss) per share |
$ |
0.15 |
|
$ |
(0.92 |
) |
||
| Weighted average number of shares outstanding: | ||||||||
| Basic |
|
19,369,060 |
|
|
19,674,539 |
|
||
| Diluted |
|
19,917,663 |
|
|
19,674,539 |
|
||
|
|
||||||
|
|
|
|||||
| ASSETS | (Unaudited) | |||||
| Current assets: | ||||||
| Cash and cash equivalents |
$ |
12,479,000 |
$ |
9,429,000 |
||
| Short-term investments |
|
2,011,000 |
|
1,881,000 |
||
| Accounts receivable — net |
|
85,532,000 |
|
91,064,000 |
||
| Inventory — net |
|
366,772,000 |
|
359,669,000 |
||
| Contract assets |
|
30,329,000 |
|
29,606,000 |
||
| Prepaid expenses and other current assets |
|
22,259,000 |
|
19,822,000 |
||
| Total current assets |
|
519,382,000 |
|
511,471,000 |
||
| Plant and equipment — net |
|
33,194,000 |
|
31,990,000 |
||
| Operating lease assets |
|
68,281,000 |
|
66,603,000 |
||
| Long-term deferred income taxes |
|
5,504,000 |
|
4,569,000 |
||
| Long-term contract assets |
|
340,529,000 |
|
336,268,000 |
||
|
|
|
3,693,000 |
|
3,757,000 |
||
| Other assets |
|
2,767,000 |
|
2,978,000 |
||
| TOTAL ASSETS |
$ |
973,350,000 |
$ |
957,636,000 |
||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||
| Current liabilities: | ||||||
| Accounts payable and accrued liabilities |
$ |
176,269,000 |
$ |
172,117,000 |
||
| Customer finished goods returns accrual |
|
32,926,000 |
|
34,411,000 |
||
| Contract liabilities |
|
49,396,000 |
|
38,158,000 |
||
| Revolving loan |
|
86,856,000 |
|
90,787,000 |
||
| Other current liabilities |
|
4,973,000 |
|
5,570,000 |
||
| Operating lease liabilities |
|
10,196,000 |
|
9,982,000 |
||
| Total current liabilities |
|
360,616,000 |
|
351,025,000 |
||
| Convertible notes, related party |
|
40,844,000 |
|
35,207,000 |
||
| Long-term contract liabilities |
|
240,021,000 |
|
241,404,000 |
||
| Long-term deferred income taxes |
|
488,000 |
|
362,000 |
||
| Long-term operating lease liabilities |
|
63,056,000 |
|
65,308,000 |
||
| Other liabilities |
|
8,212,000 |
|
6,631,000 |
||
| Total liabilities |
|
713,237,000 |
|
699,937,000 |
||
| Commitments and contingencies | ||||||
| Shareholders' equity: | ||||||
| Preferred stock; par value |
|
- |
|
- |
||
| Series A junior participating preferred stock; par value |
|
- |
|
- |
||
| Common stock; par value |
|
194,000 |
|
194,000 |
||
| Additional paid-in capital |
|
232,897,000 |
|
234,413,000 |
||
| Retained earnings |
|
23,075,000 |
|
20,033,000 |
||
| Accumulated other comprehensive income |
|
3,947,000 |
|
3,059,000 |
||
| Total shareholders' equity |
|
260,113,000 |
|
257,699,000 |
||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
$ |
973,350,000 |
$ |
957,636,000 |
||
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.
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|
Items Impacting Net Income for the Three Months Ended |
Exhibit 1 |
||||||||||||||
|
Three Months Ended |
|||||||||||||||
|
2025 |
|
2024 |
|||||||||||||
|
$ |
|
Per Diluted Share |
|
$ |
|
Per Diluted Share |
|||||||||
| GAAP net income (loss) |
$ |
3,042,000 |
|
|
$ |
0.15 |
|
|
$ |
(18,085,000 |
) |
|
$ |
(0.92 |
) |
| Non-cash items impacting net income | |||||||||||||||
| Core and finished goods premium amortization |
$ |
2,847,000 |
|
$ |
0.14 |
|
$ |
2,728,000 |
|
$ |
0.14 |
|
|||
| Revaluation - cores on customers' shelves |
|
1,026,000 |
|
|
0.05 |
|
|
394,000 |
|
|
0.02 |
|
|||
| Share-based compensation expenses |
|
946,000 |
|
|
0.05 |
|
|
1,000,000 |
|
|
0.05 |
|
|||
| Foreign exchange impact of lease liabilities and forward contracts |
|
(8,348,000 |
) |
|
(0.42 |
) |
|
11,078,000 |
|
|
0.56 |
|
|||
| Change in fair value of compound net derivative liability |
|
1,790,000 |
|
|
0.09 |
|
|
(2,580,000 |
) |
|
(0.13 |
) |
|||
| Tax effect (a) |
|
435,000 |
|
|
0.02 |
|
|
(3,155,000 |
) |
|
(0.16 |
) |
|||
| Total non-cash items impacting net income |
$ |
(1,304,000 |
) |
$ |
(0.07 |
) |
$ |
9,465,000 |
|
$ |
0.48 |
|
|||
| Cash items impacting net income | |||||||||||||||
| New product line start-up costs and transition expenses, and severance and other (b) |
|
- |
|
|
- |
|
|
2,940,000 |
|
|
0.15 |
|
|||
| Net tariff costs paid for products sold before price increases were effective |
|
1,426,000 |
|
|
0.07 |
|
|
- |
|
|
- |
|
|||
| Tax effect (a) |
|
(357,000 |
) |
|
(0.02 |
) |
|
(735,000 |
) |
|
(0.04 |
) |
|||
| Total cash items impacting net income |
$ |
1,069,000 |
|
$ |
0.05 |
|
$ |
2,205,000 |
|
$ |
0.11 |
|
|||
| (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 |
|||||||||||||||
|
Items Impacting Gross Profit for the Three Months Ended |
Exhibit 2 |
|||||||||||
|
Three Months Ended |
||||||||||||
|
|
2025 |
2024 |
||||||||||
| $ | Gross Margin | $ | Gross Margin | |||||||||
| GAAP gross profit |
$ |
33,917,000 |
18.0 |
% |
$ |
29,174,000 |
17.2 |
% |
||||
| Non-cash items impacting gross profit | ||||||||||||
| Core and finished goods premium amortization |
$ |
2,847,000 |
1.5 |
% |
$ |
2,728,000 |
1.6 |
% |
||||
| Revaluation - cores on customers' shelves |
|
1,026,000 |
0.5 |
% |
|
394,000 |
0.2 |
% |
||||
| Total non-cash items impacting gross profit |
$ |
3,873,000 |
2.1 |
% |
$ |
3,122,000 |
1.8 |
% |
||||
| Cash items impacting gross profit | ||||||||||||
| Net tariff costs paid for products sold before price increases were effective |
|
1,426,000 |
0.8 |
% |
|
- |
- |
|
||||
| Total cash items impacting gross profit |
$ |
1,426,000 |
0.8 |
% |
$ |
- |
0.0 |
% |
||||
|
Items Impacting EBITDA for the Three Months Ended |
Exhibit 3 |
||||||
|
Three Months Ended |
|||||||
|
|
2025 |
|
|
2024 |
|
||
| GAAP net income (loss) |
$ |
3,042,000 |
|
$ |
(18,085,000 |
) |
|
| Interest expense, net |
|
12,812,000 |
|
|
14,387,000 |
|
|
| Income tax expense (benefit) |
|
2,425,000 |
|
|
(178,000 |
) |
|
| Depreciation and amortization |
|
2,449,000 |
|
|
2,729,000 |
|
|
| EBITDA |
$ |
20,728,000 |
|
$ |
(1,147,000 |
) |
|
| Non-cash items impacting EBITDA | |||||||
| Core and finished goods premium amortization |
$ |
2,847,000 |
|
$ |
2,728,000 |
|
|
| Revaluation - cores on customers' shelves |
|
1,026,000 |
|
|
394,000 |
|
|
| Share-based compensation expenses |
|
946,000 |
|
|
1,000,000 |
|
|
| Foreign exchange impact of lease liabilities and forward contracts |
|
(8,348,000 |
) |
|
11,078,000 |
|
|
| Change in fair value of compound net derivative liability |
|
1,790,000 |
|
|
(2,580,000 |
) |
|
| Total non-cash items impacting EBITDA |
$ |
(1,739,000 |
) |
$ |
12,620,000 |
|
|
| Cash items impacting EBITDA | |||||||
| New product line start-up costs and transition expenses, and severance and other |
|
- |
|
|
2,940,000 |
|
|
| Net tariff costs paid for products sold before price increases were effective |
|
1,426,000 |
|
|
- |
|
|
| Total cash items impacting EBITDA |
$ |
1,426,000 |
|
$ |
2,940,000 |
||
View source version on businesswire.com: https://www.businesswire.com/news/home/20250811822279/en/
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(310) 972-5124
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