Motorcar Parts of America, Inc. (Nasdaq: MPAA) has announced its financial results for the first quarter of fiscal 2025, ending June 30, 2024. The company is maintaining a positive full-year outlook, driven by its robust industry position and strategic initiatives aimed at boosting profitability.
Fiscal First Quarter Highlights:
- Net Sales: Increased by 6.4% to a record $169.9 million, up from $159.7 million the previous year.
- Gross Profit: Rose 9.8% to $29.2 million, compared to $26.6 million last year. Gross margin improved slightly to 17.2%.
- Operating Expenses: Totaled $35.6 million, up from $16.1 million, primarily due to a non-cash $11.1 million foreign exchange loss related to lease liabilities and forward contracts. Excluding these items, operating expenses decreased by $644,000.
- Interest Expense: Increased by $2.7 million to $14.4 million, mainly due to higher receivables and costs associated with accounts receivable discount programs.
- Net Loss: The company reported a net loss of $18.1 million for the quarter, compared to a $1.4 million loss a year earlier.
Cost-Reduction Initiatives:
The company has implemented cost-reduction strategies expected to save approximately $7 million annually. This includes the strategic relocation of its Torrance, California facility, a process delayed by the COVID-19 pandemic.
CEO Statement:
“As we start the new fiscal year, we are optimistic about our outlook and confident in our ability to leverage our leadership position in the aftermarket parts market,” said Selwyn Joffe, Chairman, President, and CEO. “We anticipate significant improvements in gross margins, gross profit, and cash flow, driven by ongoing strategic actions and enhanced operational efficiencies.”
Joffe also highlighted the company’s commitment to Environmental, Social, and Governance (ESG) improvements, including a recent board refreshment and the nomination of two new directors for the 2024 annual meeting.
Further Considerations:
- Sales Volume: Shows signs of improvement with increased ordering activity and better industry fundamentals.
- Margin Improvement: Supported by multiple price increases and improved overhead absorption.
- Operational Efficiency: Expected to enhance cash flow and profitability.
Non-GAAP Measures:
This release includes EBITDA, a non-GAAP measure that supplements, but does not replace, GAAP financial performance measures. For a reconciliation of EBITDA to net income and further details, please refer to the financial tables included in this press release and our SEC filings.
Earnings Conference Call:
Selwyn Joffe and David Lee, CFO, will discuss the financial results and operations on a conference call today at 10:00 a.m. Pacific Time. The call will be available live via webcast at www.motorcarparts.com or by phone at (888) 440-5584 (domestic) or (646) 960-0457 (international). An archive of the call and a telephone playback will be available on the company’s website and by calling (800) 770-2030 (domestic) or (609) 800-9909 (toll) from August 8, 2024, to August 15, 2024, using access code: 1545314.
