Financial Performance - Consolidated net sales for the three months ended December 31, 2024, were $186,176,000, an increase of $14,314,000, or 8.3%, from $171,862,000 in the same period of 2023[112] - Gross profit for the three months ended December 31, 2024, was $44,882,000, representing a gross margin of 24.1%, compared to $30,043,000 and 17.5% in the same period of 2023[113] - Operating income for the three months ended December 31, 2024, was $17,581,000, an increase from $9,524,000 in the same period of 2023[120] - Consolidated net sales for the nine months ended December 31, 2024, were $564,249,000, an increase of $36,043,000, or 6.8%, from $528,206,000 in the same period of 2023[126] - Gross profit for the nine months ended December 31, 2024, was $115,333,000, with a gross margin of 20.4%, compared to $97,758,000 and 18.5% in the same period of 2023[128] Expenses and Costs - Interest expense for the three months ended December 31, 2024, decreased by $3,862,000, or 21.1%, to $14,435,000 from $18,297,000 in the same period of 2023[121] - Cash flow provided by operations for the three months ended December 31, 2024, was $34,357,000, down from $53,615,000 in the same period of 2023[111] - Cash flow provided by operations for the nine months ended December 31, 2024, was $36,368,000, compared to $48,445,000 in the same period of 2023[125] - Research and development expenses for the three months ended December 31, 2024, increased by $469,000, or 18.5%, to $3,008,000 from $2,539,000 in the same period of 2023[118] - General and administrative expenses increased by $5,809,000, or 13.8%, to $47,934,000 for the nine months ended December 31, 2024, primarily due to foreign currency losses and increased severance costs[130] - Research and development expenses rose by $532,000, or 7.2%, to $7,884,000 for the nine months ended December 31, 2024, driven by increased headcount[132] Financial Position and Cash Flow - Consolidated operating income decreased to $23,645,000 for the nine months ended December 31, 2024, down from $33,902,000 in the prior year, largely due to a non-cash loss of $18,966,000 from foreign exchange impacts[134] - Interest expense decreased by $2,396,000, or 5.3%, to $43,004,000 for the nine months ended December 31, 2024, attributed to lower average outstanding balances and interest rates[135] - Net cash provided by operating activities was $36,368,000 for the nine months ended December 31, 2024, down from $48,445,000 in the previous year, influenced by changes in accounts payable and receivable[144] Financing and Capital Expenditures - The company had $268,620,000 in senior secured financing, including a $238,620,000 revolving loan facility and a $30,000,000 term loan facility, with the credit facility maturing on December 12, 2028[147] - As of December 31, 2024, $94,802,000 was outstanding under the revolving facility, with an interest rate of 7.66%[148] - Total capital expenditures rose significantly to $2,531,000 for the nine months ended December 31, 2024, compared to $559,000 in 2023, marking an increase of approximately 352%[158] - The company expects to incur approximately $5,000,000 in capital expenditures during fiscal 2025 to support global growth initiatives and current operations[158] Supplier Finance and Obligations - Commitments from participating financial institutions in the supplier finance program increased to $27,000,000 from $15,000,000 during the three months ended December 31, 2024[157] - Outstanding supplier obligations confirmed as valid under the supplier finance program amounted to $31,809,000 as of December 31, 2024[157] Other Financial Information - The change in fair value of the compound net derivative liability associated with convertible notes resulted in a non-cash gain of $2,460,000 for the nine months ended December 31, 2024[136] - The company repurchased 268,130 shares of common stock for $2,096,000 during the nine months ended December 31, 2024, with $20,841,000 utilized and $16,159,000 remaining under the share repurchase program[143] - Accounts receivable discounted increased to $488,505,000 for the nine months ended December 31, 2024, compared to $465,073,000 in 2023, reflecting a growth of approximately 5.5%[156] - The annualized weighted average discount rate decreased to 6.3% in 2024 from 6.8% in 2023, indicating improved financing conditions[156] Legal and Regulatory Matters - Rent expense for a related party lease was $81,000 and $243,000 for the three and nine months ended December 31, 2024, respectively[159] - The company has no material changes in market risk from the previous disclosures as of March 31, 2024[170] - The company is currently evaluating the impact of new accounting standards issued by the FASB on its financial statement disclosures[164][167][169] - There is an immaterial amount accrued related to various lawsuits and claims against the company[162]

Company Overview and Strategy - Motorcar Parts of America (MPA) positions itself as a global leader in automotive parts and solutions[2] - The company has a global network of manufacturing and distribution facilities[5, 6] - MPA focuses on premium non-discretionary replacement hard-part offerings and component testing equipment[8] - The company emphasizes a scalable infrastructure to support growth and profitability, with 96% offshore production and an international workforce of approximately 6,000[11, 12] Market Opportunities - MPA highlights significant opportunities within multiple non-discretionary automotive replacement part categories in the U S market, including a $9.62 billion market for brake pads and rotors[14, 17] - The company sees a large market opportunity in its strategic brake product line, leveraging its current customer base and new customer opportunities[19, 20] - Consistent increases in average vehicle age, annual miles driven, and the expanding size of the total car parc bode well for the automotive aftermarket[24] Value-Added Programs - MPA has long-standing customer relationships with national retailers, traditional aftermarket outlets, and OES suppliers[25] - The company offers value-added programs through its award-winning marketing, merchandising, and sales team partnerships[29] - MPA provides a comprehensive suite of services through its Motorcar Parts Street SmartTM Suite, including market analysis, tailored customer programs, and category management[30]

Financial Data and Key Metrics Changes - Net sales increased by 8.3% to a record $186.2 million for the fiscal 2025 third quarter, up from $171.9 million in the prior year [26][28] - Gross profit rose by 49.4% to a record $44.9 million, compared to $30 million a year earlier [26][28] - Net income for the quarter was $2.3 million, a significant improvement from a net loss of $47.2 million in the prior year [35] - EBITDA for the fiscal third quarter was $20.4 million, reflecting a $6.6 million impact of non-cash expenses [35] Business Line Data and Key Metrics Changes - The rotating electrical category continues to perform solidly, with expectations for further opportunities to add retail and traditional customers [10] - Brake-related products, the second-largest category, are expected to see strong demand, particularly as the spring repair season approaches [12][23] - The diagnostic business is experiencing success with the JBT one bench top test, aiming for a $100 million milestone in diagnostic equipment [17] Market Data and Key Metrics Changes - The company is seeing increased demand for aftermarket parts in Mexico, with strong growth in hard parts sales [20][21] - The average age of vehicles in the U.S. is now 12.8 years, indicating a favorable market for nondiscretionary aftermarket parts [24] Company Strategy and Development Direction - The company is focused on enhancing profitability through gross margin expansion and neutralizing working capital [9][40] - Strategic initiatives include improving operational efficiencies and leveraging a low-cost global footprint [16][20] - The company aims to increase market share in emerging markets and enhance shareholder value through cash generation and share repurchases [10][41] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about the outlook, emphasizing the importance of operational efficiencies and a strong liquidity position [82][84] - The company is managing through tariff impacts and has implemented surcharges to offset costs associated with tariffs on goods from China [46][83] - Interest rates have decreased, which is expected to benefit profitability if the trend continues [15] Other Important Information - Non-cash items reduced net income by $5 million and gross profit by $3.4 million for the quarter [27] - The company repurchased 268,130 shares for $2.1 million at an average price of $7.82 under its repurchase authorization program [9][41] Q&A Session Summary Question: Impact of Tariffs on Business - Management noted that they have implemented tariff surcharges and have become less dependent on China, expecting minimal material impact from tariffs [46][47] Question: Gross Margin Expansion - Management indicated that gross margin expansion is driven by operational efficiencies and increased revenue absorption, with ongoing initiatives to enhance production efficiency [48][50] Question: Future Cash Utilization - The company plans to continue generating cash flow, pay down debt, and be opportunistic with share repurchases to enhance shareholder value [54][55] Question: Seasonal Sales and Gross Profit - Management explained that despite lower sales in December, gross profit dollars increased due to improved operational efficiency and production initiatives [59][61]

Financial Performance - Net sales for fiscal 2025 third quarter increased 8.3% to a record $186.2 million from $171.9 million in the prior year[4] - Gross profit for fiscal 2025 third quarter increased 49.4% to a record $44.9 million from $30.0 million a year earlier, with a gross margin of 24.1% compared to 17.5%[5] - Net income for the fiscal 2025 third quarter was $2.3 million, or $0.11 per diluted share, a significant improvement from a net loss of $47.2 million in the prior year[8] - For the nine-month period, net sales increased 6.8% to a record $564.2 million from $528.2 million a year ago[11] - Gross profit for the nine-month period increased 18.0% to a record $115.3 million, with a gross margin of 20.4% compared to 18.5% a year earlier[12] - GAAP net income for the three months ended December 31, 2024, was $2,291,000, compared to a net loss of $47,214,000 for the same period in 2023[29] - GAAP gross profit for the three months ended December 31, 2024, was $44,882,000, with a gross margin of 24.1%, up from $30,043,000 and a margin of 17.5% in 2023[34] - For the nine months ended December 31, 2024, GAAP net loss was $18,748,000, an improvement from a loss of $50,582,000 in the same period of 2023[31] - The company reported a gross profit of $115,333,000 for the nine months ended December 31, 2024, with a gross margin of 20.4%, compared to $97,758,000 and 18.5% in 2023[36] Cash Flow and Debt Management - Cash generated from operating activities during fiscal 2025 third quarter was approximately $34.4 million, and net bank debt was reduced by $30.3 million to $84.0 million[10] - Total current liabilities decreased from $404,425,000 on March 31, 2024, to $348,611,000 on December 31, 2024, a reduction of approximately 13.8%[25] - Cash and cash equivalents decreased from $13,974,000 on March 31, 2024, to $10,810,000 on December 31, 2024, a decline of approximately 22.9%[25] Shareholder Value and Strategic Initiatives - The company remains focused on enhancing shareholder value and achieving continued success through strategic initiatives[9] - The company repurchased 268,130 shares for $2.1 million at an average share price of $7.82 during the fiscal third quarter[15] Expenses and Non-Cash Items - Interest expense for the fiscal third quarter decreased by $3.9 million to $14.4 million from $18.3 million a year ago[7] - Non-cash expenses impacted net income by $5.0 million and gross profit by $3.4 million for the fiscal 2025 third quarter[6] - Non-cash items impacting net income for the three months ended December 31, 2024, totaled $4,961,000, compared to $40,372,000 in 2023[29] - Total non-cash items impacting EBITDA rose to $6.615 million in Q3 2024, up from $3.881 million in Q3 2023, indicating increased non-cash expenses[37] Supply Chain and Operational Challenges - The company experienced supply chain disruptions impacting gross profit, with costs of $1,555,000 for the three months ended December 31, 2023[30] - Supply chain disruptions and related costs were eliminated in Q3 2024, compared to $1.555 million in Q3 2023[37] Tax and Depreciation - Income tax expense for Q3 2024 was $1.115 million, a decrease from $37.281 million in Q3 2023, reflecting a reduction of 97%[37] - Depreciation and amortization expenses decreased to $2.532 million in Q3 2024 from $2.878 million in Q3 2023, a decline of 12%[37] EBITDA Performance - EBITDA for Q3 2024 increased to $20.373 million, compared to $11.242 million in Q3 2023, reflecting a growth of 81.7%[37] - The company reported a total of $33.967 million in EBITDA for the nine months ended December 31, 2024, down from $40.888 million in the same period of 2023[37] - Foreign exchange impact of lease liabilities and forward contracts contributed $2.460 million to EBITDA in Q3 2024, compared to a negative impact of $3.149 million in Q3 2023[37] Asset Management - Total assets decreased from $1,012,002,000 on March 31, 2024, to $949,508,000 on December 31, 2024, representing a decline of approximately 6.2%[25] - Long-term contract assets increased from $320,282,000 on March 31, 2024, to $334,424,000 on December 31, 2024, an increase of approximately 4.3%[25]

Financial Data and Key Metrics - Net sales increased 5.9% to a record $208.2 million in Q2 FY2025, up from $196.6 million in the prior year [26][27] - Gross profit reached a record $41.3 million in Q2 FY2025, compared to $41.1 million a year earlier [26][27] - Gross margin for Q2 FY2025 was 19.8%, down from 20.9% in the prior year, impacted by non-cash expenses and one-time transition costs [29] - The company generated $22.9 million in cash from operating activities and reduced net bank debt by $22 million during the quarter [26][42] - Net loss for Q2 FY2025 was $3 million, or $0.15 per share, impacted by $8 million in non-cash expenses and $1.1 million in one-time cash expenses [35] Business Line Performance - Brake-related products have grown to become the company's second-largest category, contributing to operational efficiencies and margin improvement [8][9] - The diagnostic business is expected to sell over $100 million of equipment within the next three years, with additional service revenue opportunities as more testers are deployed [16] - Heavy-duty business continues to leverage its reputation in supplying alternators and starters, with growth opportunities in agriculture, trucks, refrigeration, and construction [17][18] - The company introduced 505 new part numbers, covering 302 million vehicles on the road, maintaining its leadership position in the categories it supplies [15] Market Performance - Sales in Mexico are growing, with increased demand for aftermarket parts, and the company is focused on increasing its market share in the region [20] - The company benefits from relationships with U.S.-based retailers and warehouse distributors expanding into the Mexican market, as well as independent Mexican distributors [20] - The U.S. car park is 98.8% comprised of hybrid and internal combustion engine vehicles, with the average vehicle age now at 12.8 years, supporting long-term demand for non-discretionary aftermarket parts [23] Strategic Direction and Industry Competition - The company is focused on sales growth, profitability, and neutralizing working capital, leveraging its global footprint and operational efficiencies [19][41] - Strategic cost reductions, including the relocation of certain operations, are expected to generate annual savings of $7.1 million, with 90% of savings reducing the cost of goods sold [12] - The company is actively exploring additional initiatives to reduce costs of goods sold and improve gross margins [13] - The company is accelerating new part number introductions, targeting at least 800 per year, to maintain its leadership position and meet consumer needs [15] Management Commentary on Operating Environment and Future Outlook - Management remains optimistic about achieving full-year targets, with strong demand for non-discretionary products and operational efficiencies driving growth [6][19] - The company expects tailwinds from lower interest rates, which will positively impact profitability moving forward [11] - Management highlighted the impact of non-cash foreign exchange losses due to a strengthening dollar versus the peso, but is working to minimize these expenses [9][10] - The company is focused on capital allocation to maximize shareholder value and expects continued growth in sales and profitability [14][22] Other Important Information - The company reported a $10.6 million impact from non-cash items in Q2 FY2025, including foreign exchange losses and core accounting adjustments [26][30] - Interest expense decreased by $1.2 million to $14.2 million in Q2 FY2025, primarily due to lower average outstanding balances under the credit facility and lower interest rates [33] - The company expects to benefit from future tax rate reductions as losses in specific jurisdictions are utilized against future profits [34] Q&A Session Summary Question: Explanation of increased operating income guidance - The increase in operating income guidance from $62-67 million to $79-84 million is due to the inclusion of $17 million in non-cash items, which were previously excluded [44] Question: Momentum in ordering activity - The company is seeing strong demand across its product lines, particularly in brake calipers, despite a soft market [45][46] - The top five customers are driving significant growth, with different categories performing well across these customers [49] Question: Details on $1.3 million transition costs - The transition costs were related to relocating operations from Torrance, including wheel hub production and rotating electrical activities, with expected margin accretion [50][51] Question: $2.7 million one-time expenses for onboarding new business - The expenses were related to onboarding new rotating electrical business with an existing customer, set to begin shipping in January [54] Question: Price increases - The company expects one price increase in January, with the impact already reflected in guidance [56][57] Question: Update on professional installer business - The professional installer business is growing, with additional team members added to support this segment [59]

Financial Performance - Consolidated net sales for the three months ended September 30, 2024, were $208,186,000, an increase of $11,547,000, or 5.9%, from $196,639,000 for the same period in 2023[95] - Gross profit for the three months ended September 30, 2024, was $41,277,000, representing a gross margin of 19.8%, down from 20.9% in the same period of 2023[96] - Operating income for the three months ended September 30, 2024, was $12,520,000, compared to $13,937,000 for the same period in 2023, reflecting a decrease due to foreign exchange impacts[102] - Consolidated net sales for the six months ended September 30, 2024, were $378,073,000, an increase of $21,729,000, or 6.1%, from $356,344,000 for the same period in 2023[109] - Gross profit for the six months ended September 30, 2024, was $70,451,000, with a gross margin of 18.6%, slightly down from 19.0% in the same period of 2023[111] - Operating income decreased to $6,064,000 for the six months ended September 30, 2024, down from $24,378,000 in the same period of 2023[117] Cash Flow and Expenses - Cash flow provided by operations for the six months ended September 30, 2024, was $2,011,000, a significant improvement from a cash outflow of $5,170,000 for the same period in 2023[108] - General and administrative expenses for the three months ended September 30, 2024, were $15,052,000, an increase of $727,000, or 5.1%, from $14,325,000 in the same period of 2023[99] - General and administrative expenses increased by $4,795,000, or 17.8%, to $31,722,000 for the six months ended September 30, 2024, compared to $26,927,000 for the same period in 2023[113] - Interest expense for the three months ended September 30, 2024, was $14,182,000, a decrease of $1,201,000, or 7.8%, from $15,383,000 in the same period of 2023[103] - Interest expense increased by $1,466,000, or 5.4%, to $28,569,000 for the six months ended September 30, 2024, compared to $27,103,000 for the same period in 2023[118] Operational Changes - The company has ceased manufacturing at its Torrance, California facility and is realigning production to enhance operating efficiencies[91] - The company expects to realize future benefits from cost-saving initiatives and new business onboarding expenses totaling $2,686,000 for the three months ended September 30, 2024[111] Financial Position - The company had working capital of $154,260,000 and a current ratio of 1.4:1.0 as of September 30, 2024[122] - The company utilized $18,745,000 of its $37,000,000 share repurchase program as of September 30, 2024[125] - Receivables discounted under accounts receivable discount programs increased to $303,638,000 for the six months ended September 30, 2024, from $255,303,000 in the same period of 2023[139] - The effective interest rate on the company's revolving facility was 8.17% as of September 30, 2024[130] - The company had $26,487,000 of outstanding supplier obligations confirmed as valid under the supplier finance program, included in accounts payable and accrued liabilities[140] Market and Risk Assessment - Foreign exchange impact of lease liabilities and forward contracts resulted in non-cash losses of $16,506,000 for the six months ended September 30, 2024, compared to $490,000 in the same period of 2023[115] - The change in fair value of the compound net derivative liability resulted in a non-cash gain of $2,200,000 for the six months ended September 30, 2024, compared to a loss of $530,000 in the same period of 2023[119] - As of September 30, 2024, $15,000,000 of commitments from participating financial institutions is available to suppliers under the supplier finance program[140] - There have been no material changes in market risk from the information provided in the Annual Report on Form 10-K as of March 31, 2024[151] Capital Expenditures - Total capital expenditures for the six months ended September 30, 2024, were $1,219,000, compared to $315,000 for the same period in 2023, reflecting a significant increase[141] - Capital expenditures for fiscal 2025 are expected to be approximately $5,000,000 to support global growth initiatives and current operations[141] Governance and Compliance - The Board appointed Douglas Trussler to the Board in connection with the issuance of Convertible Notes on March 31, 2023[143] - The company is evaluating the impact of new accounting standards issued by the FASB, including ASU 2023-06 and ASU 2023-07, which will affect financial statement disclosures[147][148]

Financial Performance - Net sales for the fiscal 2025 second quarter increased 5.9% to a record $208.2 million from $196.6 million in the prior year[4]. - Gross profit for the fiscal 2025 second quarter reached a record $41.3 million, with a gross margin of 19.8%, down from 20.9% a year earlier[5]. - Net loss for the fiscal 2025 second quarter was $3.0 million, or $0.15 per share, compared to a net loss of $2.0 million, or $0.10 per share, a year ago[7]. - For the six-month period, net sales increased 6.1% to a record $378.1 million from $356.3 million a year ago[11]. - GAAP net loss for the three months ended September 30, 2024, was $(2,954,000), compared to a net loss of $(1,958,000) in the same period of 2023[28]. - The company reported a GAAP net loss of $(21,039,000) for the six months ended September 30, 2024, compared to a net loss of $(3,368,000) in the same period of 2023[29]. Cash Flow and Debt Management - The company generated $22.9 million in cash from operating activities and reduced net bank debt by $22.0 million to $114.3 million[10]. - Interest expense for the fiscal second quarter decreased by $1.2 million to $14.2 million from $15.4 million a year ago[6]. - Interest expense for Q3 2024 was $14,182,000, slightly down from $15,383,000 in Q3 2023[32]. Guidance and Future Expectations - Fiscal 2025 guidance estimates net sales between $746 million and $766 million, representing 3.9% to 6.7% year-over-year growth[17]. - The company expects operating income for fiscal 2025 to be between $79 million and $84 million, before certain non-cash items and one-time expenses[17]. - The company anticipates continued improvements in gross margins, gross profit, and cash flow in the upcoming quarters[8]. Asset and Liability Management - Total current assets decreased to $548,202,000 as of September 30, 2024, from $560,459,000 as of March 31, 2024, representing a decline of approximately 2.3%[24]. - Total liabilities decreased slightly to $722,279,000 as of September 30, 2024, from $726,892,000 as of March 31, 2024[24]. - Total shareholders' equity decreased to $263,963,000 as of September 30, 2024, from $285,110,000 as of March 31, 2024, a decline of approximately 7.4%[24]. Inventory and Receivables - Accounts receivable increased to $112,699,000 as of September 30, 2024, up from $96,296,000, reflecting a growth of about 17%[24]. - Inventory decreased to $378,776,000 as of September 30, 2024, down from $397,328,000, indicating a reduction of approximately 4.7%[24]. Non-Cash and Cash Items Impact - Non-cash items impacting net income for the three months ended September 30, 2024, totaled $7,957,000, compared to $8,665,000 in 2023[28]. - EBITDA for the six months ended September 30, 2024, was significantly impacted by foreign exchange effects, totaling $16,506,000[29]. - New product line start-up costs for the six months ended September 30, 2024, amounted to $4,438,000, compared to $684,000 in the same period of 2023[29]. - Total non-cash items impacting gross profit for Q3 2024 amounted to $3,785,000, representing 1.8% of gross profit, down from $4,702,000 or 2.4% in Q3 2023[30]. - Cash items impacting gross profit in Q3 2024 included new product line start-up costs of $1,298,000, while supply chain disruptions in Q3 2023 incurred costs of $3,199,000[30]. - Total non-cash items impacting EBITDA for Q3 2024 were $10,609,000, down from $11,553,000 in Q3 2023[32]. - Cash items impacting EBITDA for Q3 2024 included new product line start-up costs of $1,498,000, while Q3 2023 had cash items of $3,548,000[32]. Gross Profit and Margins - Gross margin for the fiscal 2025 six-month period was 18.6%, compared to 19.0% a year earlier, impacted by non-cash and one-time cash expenses[12]. - GAAP gross profit for Q3 2024 was $41,277,000, with a gross margin of 19.8%, compared to $41,148,000 and a gross margin of 20.9% in Q3 2023[30]. - For the first six months of 2024, GAAP gross profit was $70,451,000, reflecting a gross margin of 18.6%, versus $67,715,000 and a gross margin of 19.0% in the same period of 2023[31]. - The company experienced a decrease in supply chain disruption costs from $5,183,000 in the first half of 2023 to no costs reported in the first half of 2024[31].

Group 1 - Motorcar Parts of America (NASDAQ: MPAA) has been actively expanding its product range and improving operations, yet it continues to face long-standing financial difficulties and poor stock performance [1] - The mission of Grassroots Trading emphasizes providing objective and unbiased research focused on small- to mid-cap companies, while also identifying opportunities in larger companies [1]

Financial Data and Key Metrics - Net sales increased 6.4% to a first quarter record of $169.9 million, up from $159.7 million in the prior year [14] - Gross profit increased 9.8% to $29.2 million, with gross margin rising to 17.2% from 16.6% a year earlier [14][16] - Operating expenses were $35.6 million, impacted by a $11.1 million non-cash foreign exchange loss and $2.9 million in severance expenses [16][17] - Net loss for the quarter was $18.1 million, compared to a net loss of $1.4 million a year ago [19] - EBITDA for the quarter was negative $1.1 million, primarily due to non-cash items and severance expenses [20] Business Line Performance - Product mix for the quarter: 65% rotating electrical, 7% wheel hubs, 24% brakes, and 4% others [24] - The brake program is expected to drive margin accretion as volume increases absorb overhead [6] - The Diagnostic business is projected to sell over $100 million of equipment in the next 3 years, with additional service revenue opportunities [8] - Heavy-Duty business continues to gain momentum across multiple platforms, including agriculture, Class 8 trucks, and construction [9] Market Performance - Sales in Mexico are growing, driven by increased demand for aftermarket parts and the expansion of U.S.-based retailers in the region [11] - The company opened a new facility in Malaysia to support wheel hub manufacturing, enhancing its competitive position [10] - The average age of vehicles in the U.S. is now 12.8 years, with 98.8% of the car park comprising hybrid and internal combustion vehicles, supporting long-term demand for non-discretionary aftermarket parts [12] Strategic Initiatives and Industry Competition - The company is focused on cost reduction initiatives, including a multiyear relocation process expected to generate $7 million in annualized savings [5] - Accelerating new part number introductions, targeting at least 800 per year, to maintain leadership in the categories supplied [8] - The company is leveraging its global footprint, including a new facility in Malaysia, to enhance operational efficiencies and meet growing demand [10] Management Commentary on Operating Environment and Future Outlook - Management remains optimistic about achieving full-year targets, with strong sales performance in July and expectations for further improvements in gross margin [4] - The company is focused on neutralizing working capital, improving inventory management, and extending vendor payment terms to enhance cash flow [21] - Management highlighted the positive impact of cost-saving initiatives and the potential for further efficiencies as new product lines gain traction [25] Other Important Information - The company announced the election of Jack Liebau and Anil Shrivastava to the Board, emphasizing their qualifications and commitment to driving shareholder value [13] - The company expects to generate positive cash flow for the full fiscal year, with operating income projected between $62 million and $67 million before non-cash items [22] Q&A Session Summary Question: Breakdown of revenue by product line and inventory dynamics - Revenue breakdown: 65% rotating electrical, 7% wheel hubs, 24% brakes, and 4% others [24] - Inventory levels are expected to moderate as the company enters a stronger second quarter, with significant progress in working capital anticipated [29][30] Question: Interest expense outlook and potential savings - Every 1% reduction in interest rates could save the company $7 million annually, with management encouraged by recent rate reductions [26] Question: Timing of new Brake business revenue - The largest tranche of Brake business is expected to start in January, with additional new business in Wheel Hubs and Rotating Electrical starting in the next few months [31] Question: Impact of higher returns on gross margin - Higher returns were due to a large customer's lower purchase levels, but this has already reversed in the current quarter, with return levels expected to normalize [32] Question: Spillover effect of Quality-Built brand success - The Quality-Built brand is gaining traction in the professional installer market, with positive feedback on brake pads and rotors expected to spill over to other product lines [34][38] Question: Opportunity in the Mexican market - The Mexican market is evolving, with increasing disposable income and the entry of major U.S. retailers, presenting a significant growth opportunity for the company [41][42] Question: Electric Vehicle Testing business outlook - The Electric Vehicle Testing business is experiencing slower growth, with the electric vehicle space not unfolding as quickly as anticipated, while hybrid technology is gaining momentum [36][37]

Exhibit 99.1 NEWS RELEASE CONTACT: Gary S. Maier Vice President, Corporate Communications & IR (310) 972-5124 MOTORCAR PARTS OF AMERICA REPORTS FISCAL FIRST QUARTER RESULTS - Record Sales for a First Quarter; Full-Year Outlook Remains on Track LOS ANGELES, CA – August 8, 2024 – Motorcar Parts of America, Inc. (Nasdaq: MPAA) today reported results for its fiscal 2025 first quarter ended June 30, 2024, with a continued favorable full-year outlook supported by a strong competitive industry position and ongoing ...