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 ...

Financial Performance - Sales increased by 5.1 percent to a record $717.7 million in fiscal 2024[149] - Gross profit rose 16.3 percent to $132.6 million, with gross margin increasing by 1.8 percentage points to 18.5 percent[149] - Operating income increased 26.5 percent to $46.1 million[149] - Consolidated net sales for fiscal 2024 were $717,684,000, an increase of $34,610,000, or 5.1%, from fiscal 2023's $683,074,000 due to strong demand for rotating electric and brake-related product lines[200] - Consolidated gross margin improved to 18.5% in fiscal 2024 from 16.7% in fiscal 2023, attributed to better facility utilization and price increases[201] - Operating income for fiscal 2024 was $46,120,000, an increase of $9,674,000, or 26.5%, from $36,446,000 in fiscal 2023[209] Cash Flow and Debt Management - Cash generated from operating activities was approximately $39.2 million[149] - Cash flows provided by operations for fiscal 2024 were $39,172,000, a significant improvement from $(21,754,000) in fiscal 2023[199] - Net bank debt was reduced by $32.5 million to $114.0 million[149] - The outstanding balance under the Revolving Facility was $128,000,000 as of March 31, 2024, compared to $145,200,000 in 2023[227] - The company issued $32,000,000 in convertible notes due in 2029, bearing an interest rate of 10.0% per annum, with the first interest payment due on April 1, 2024[229] - The effective interest rate on the convertible notes was 18.3% as of March 31, 2024, reflecting the amortization of debt issuance costs[238] Inventory and Returns - Reserves for excess and obsolete inventory increased to $17,372,000 at March 31, 2024, from $16,436,000 at March 31, 2023, primarily due to excess finished goods inventory[173] - Customer finished goods returns accrual was $38,312,000 at March 31, 2024, compared to $37,984,000 at March 31, 2023, reflecting changes in returned goods authorizations[193] - Finished goods turnover for fiscal 2024 was 3.7, slightly down from 3.6 in fiscal 2023, indicating a stable ability to convert inventory into revenue[199] Expenses and Cost Management - General and administrative expenses increased by $3,013,000, or 5.5%, to $57,769,000 in fiscal 2024 from $54,756,000 in fiscal 2023[204] - Research and development expenses decreased by $327,000, or 3.2%, to $9,995,000 in fiscal 2024 from $10,322,000 in fiscal 2023[207] - Interest expense rose to $60,040,000 in fiscal 2024, an increase of $20,485,000, or 51.8%, from $39,555,000 in fiscal 2023, primarily due to higher interest rates[210] Market and Operational Developments - A new facility was opened in Malaysia to support manufacturing of wheel hub products[149] - Market share for brake-related product lines increased, particularly in the professional installer market[149] - Sales growth in the Mexican market continued to accelerate, driven by market share gains[149] Financial Position and Risks - The company had working capital of $156,034,000 with a current ratio of 1.4:1.0 as of March 31, 2024[216] - The company recorded a discrete non-cash valuation allowance of $38,009,000 on deferred tax assets during fiscal 2024, leading to an effective tax rate of (276.8)%[213] - The company maintains an allowance for credit losses deemed adequate to cover potential losses from accounts receivable[255] - The company is exposed to foreign currency exchange risks primarily from the Mexican peso and Chinese yuan, and uses forward contracts to mitigate these risks[253] - The company’s financial position could be adversely affected if customers experience significant cash flow problems, impacting the outstanding receivable balance and the value of Remanufactured Cores[255] Future Outlook and Investments - Total capital expenditures for fiscal 2024 were $1,755,000, with an expected increase to approximately $7,000,000 for fiscal 2025 to support global growth initiatives[246] - The company has contractual obligations totaling $369,712,000, with significant payments due in the next 1 to 3 years amounting to $56,504,000[247] - The company has not repurchased any shares during fiscal 2024 and 2023, with $18,255,000 remaining available under the share repurchase program as of March 31, 2024[245]

Financial Data and Key Metrics Changes - Net sales increased by 5.1% to $717.7 million for fiscal year 2024, compared to $683.1 million in the previous year [4][5] - Gross profit rose by 16.3% to $132.6 million from $114 million a year earlier, with gross margin increasing by 1.8 percentage points to 18.5% [4][6] - Operating income for the full fiscal year increased by 26.5% to $46.1 million from $36.4 million in the prior year [8] - Interest expense for the full year was $60 million, up from $39.6 million, primarily due to higher market interest rates [9] Business Line Data and Key Metrics Changes - The fourth quarter net sales were $189.5 million, down from $194.7 million in the prior year, primarily impacted by softer wheel hub sales [5] - Gross profit for the fourth quarter was $34.8 million compared to $36.2 million a year earlier [6] - Operating income for the fourth quarter was $12.2 million, down from $23.7 million in the prior year [8] Market Data and Key Metrics Changes - The company is experiencing growth in all product categories except for wheel hubs, which are expected to regain momentum [25] - The hard part sales in Mexico are gaining momentum, with a focus on additional opportunities across multiple product lines [33] Company Strategy and Development Direction - The company is focused on generating cash from increased profitability and working capital, with expectations of benefiting from volume increases in the brake program [12] - Strategic initiatives include extending days outstanding on payables to reduce working capital by $20 million [13] - The company aims to introduce at least 800 new part numbers per year to maintain its leadership position [15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about a vibrant market and expects growth across all product lines, attributing some of the positive trends to weather and tax refunds [47] - The company anticipates achieving sales in the range of $746 million to $766 million for fiscal 2025, representing a year-over-year growth of 3.9% to 6.7% [96] - Management acknowledged the challenges posed by higher interest expenses but remains confident in the company's liquidity and cash generation capabilities [11][74] Other Important Information - The company has received input from major shareholders regarding board qualifications and is in the process of refreshing the board [2][37] - A new facility in Malaysia has been opened to support manufacturing of wheel hub products, enhancing competitive positioning [32] Q&A Session Summary Question: What trends are benefiting the April and May numbers? - Management noted a vibrant market with increases across all product lines, not just wheel hubs, and attributed some of this to weather and tax refunds [47] Question: When will the brake business margins meet company averages? - Management indicated that brake margins are currently below legacy product margins and expects significant improvement over the next two years [51][91] Question: Why has the wheel hub business been soft? - Management acknowledged a short-term setback in wheel hub sales but expects to regain momentum soon, with no current weakness in other product lines [58] Question: Will the board consider a buyback given the decline in shareholder equity? - Management confirmed that a buyback is authorized and would be considered, emphasizing strong liquidity and cash generation [74] Question: What can be communicated to prospective investors regarding recent earnings disappointment? - Management highlighted expectations for margin accretion and growth in products, along with incremental cash flow and flexibility in capital allocation [77]

Motorcar Parts (MPAA) came out with quarterly earnings of $0.06 per share, missing the Zacks Consensus Estimate of $0.16 per share. This compares to loss of $0.05 per share a year ago. These figures are adjusted for non-recurring items. Motorcar Parts, which belongs to the Zacks Automotive - Replacement Parts industry, posted revenues of $189.48 million for the quarter ended March 2024, missing the Zacks Consensus Estimate by 4.59%. This compares to year-ago revenues of $194.73 million. The company has topp ...

Exhibit 99.1 NEWS RELEASE CONTACT: Gary S. Maier Vice President, Corporate Communications & IR (310) 972-5124 MOTORCAR PARTS OF AMERICA REPORTS YEAR-END RESULTS Interest expense for the fiscal fourth quarter increased by $2.8 million, or $0.09 per diluted share, to $14.6 million from $11.9 million a year ago, primarily due to higher market interest rates and increased collection of receivables utilizing accounts receivable discount programs on higher sales, partially offset by lower average outstanding bala ...

Perhaps even better evidence of a long-term bottom can be found in the eash EBITDA and sales ratios vs. enterprise value. EV to trailing EBITDA stats over the past 30 YCharts - Motorcar Parts of America, EV to EBITDA, Since 1994, Recessions Shaded Then, when we compare/contrast Motorcar Parts of America's EBITDA valuation to pears and competitors in the auto parts industry, the stock really stands out as a bargain. The 2.1x estimate is far below the industry median average of 5.5x (60% discount actually), a ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 2023 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission File No. 001-33861 MOTORCAR PARTS OF AMERICA, INC. (Exact name of registrant as specified in its charter) New York 11-2153962 (State or other jurisdiction ...