Motorcar Parts of America, Inc. (NASDAQ:MPAA) Q4 2022 Earnings Conference Call June 14, 2022 1:00 PM ET Company Participants Gary Maier - VP, Corporate Communications and IR Selwyn Joffe - Chairman, President & CEO David Lee - CFO Conference Call Participants Mike Zabran - Roth Capital William Dezellem - Tieton Capital Management Operator Ladies and gentlemen, thank you for standing by. My name is Brent and I will be your conference operator today. At this time, I would like to welcome everyone to Motorcar ...

Form 10-K ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended March 31, 2022 OR ☐ 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 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 MOTORCAR PARTS OF AMERICA, INC. (Exact name of registrant as specified in its charter) New York 11-2153962 (State o ...

Motorcar Parts of America, Inc. (NASDAQ:MPAA) Q3 2022 Earnings Conference Call February 9, 2022 1:00 PM ET Company Participants Gary Maier - VP, Corporate Communications and IR Selwyn Joffe - Chairman, President & CEO David Lee - CFO Conference Call Participants Matthew Koranda - ROTH Capital Partners Scott Stember - CL King & Associates Brian Nagel - Oppenheimer William Dezellem - Tieton Capital Management Operator Good morning. My name is David, and I'll be your conference operator today. At this time, I ...

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, 2021 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging g ...

Motorcar Parts of America, Inc. (NASDAQ:MPAA) Q2 2022 Earnings Conference Call November 9, 2021 1:00 PM ET Company Participants Gary Maier - Investor Relations Selwyn Joffe - Chairman, President, and Chief Executive Officer David Ashley Lee - Chief Financial Officer Conference Call Participants Sarkis Sherbetchyan - B. Riley Securities Matt Koranda - Roth Capital Scott Stember - CL King Brian Nagel - Oppenheimer Bill Dezellem - Tieton Capital Operator Good day and thank you for standing by. Welcome to Motor ...

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 SEPTEMBER 30, 2021 ☐ 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 ...

Motorcar Parts of America, Inc. (NASDAQ:MPAA) Q1 2022 Earnings Conference Call August 9, 2021 1:00 PM ET Company Participants Gary Maier - VP, Corporate Communications and IR Selwyn Joffe - Chairman, President & CEO David Lee - CFO Conference Call Participants Sarkis Sherbetchyan - B. Riley Securities Matthew Koranda - ROTH Capital Partners Brian Nagel - Oppenheimer Scott Stember - CL King & Associates Operator Good day, and thank you for standing by. Welcome to the Motorcar Parts of America's Fiscal 2022 F ...

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 JUNE 30, 2021 ☐ 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 of i ...

Motorcar Parts of America, Inc. (NASDAQ:MPAA) Q4 2021 Earnings Conference Call June 14, 2021 1:00 PM ET Company Participants Gary Maier - Investor Relations Selwyn Joffe - Chairman, President & Chief Executive Officer David Lee - Chief Financial Officer Conference Call Participants Scott Stember - C.L. King Brian Nagel - Oppenheimer Sarkis Sherbetchyan - B. Riley Securities Michael Zabran - ROTH Capital Matt Dhane - Tieton Capital Management Operator Good day. Thank you for standby. Welcome to the Motorcar ...

Part I [Business](index=6&type=section&id=Item%201.%20Business) MPA is a leading supplier of automotive aftermarket parts and diagnostic equipment, operating in the **$130 billion** North American market with a focus on remanufacturing and EV/aerospace test solutions - MPA operates in the **$130 billion** non-discretionary automotive aftermarket in North America, with a core business in rotating electrical parts and a strategic expansion into brake products and heavy-duty applications[20](index=20&type=chunk)[21](index=21&type=chunk) - Strategically expanding into test solutions and diagnostic equipment for the **EV and aerospace industries**, targeting a multi-billion-dollar global market[22](index=22&type=chunk)[26](index=26&type=chunk)[27](index=27&type=chunk) Customer Concentration (Fiscal Years 2019-2021) | Customer Group | FY 2021 (%) | FY 2020 (%) | FY 2019 (%) | | :--- | :--- | :--- | :--- | | **Three Largest Customers (Aggregate)** | 87% | 84% | 83% | | **Largest Customer (AutoZone)** | 42% | 38% | 38% | - Remanufacturing process primarily in **Mexico, Canada, and Malaysia**, utilizing lean manufacturing and IATF 16949/ISO 9001 quality standards[46](index=46&type=chunk)[47](index=47&type=chunk)[48](index=48&type=chunk) - As of March 31, 2021, the company employed approximately **5,700 people globally**, with **4,800 in Mexico** and **4,700 production employees unionized**[57](index=57&type=chunk) [Risk Factors](index=13&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from the COVID-19 pandemic, high customer concentration, intense competition, and challenges associated with extensive offshore operations - COVID-19 pandemic poses significant risks including supply chain delays, increased freight costs, and reduced consumer demand[71](index=71&type=chunk)[73](index=73&type=chunk) - High customer concentration is a major risk, with the **three largest customers accounting for 87% of net sales in fiscal 2021**[74](index=74&type=chunk) - The business is highly competitive, facing pressure from large domestic and international suppliers and emerging Chinese manufacturers[75](index=75&type=chunk)[76](index=76&type=chunk) - Offshore operations, especially in Mexico, expose the company to political, economic, and currency risks, with **23% of fiscal 2021 expenses in non-USD currencies**[98](index=98&type=chunk)[100](index=100&type=chunk) - Potential new tariffs on goods imported from China and other countries could materially affect operations[102](index=102&type=chunk) [Unresolved Staff Comments](index=21&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) No unresolved staff comments have been reported by the company - None [Properties](index=22&type=section&id=Item%202.%20Properties) The company's material facilities are primarily leased, located in the US, Mexico, Canada, and Asia, including over **1 million sq ft** in Tijuana, Mexico Major Leased Facilities | Location | Type of Facility | Approx. Square Feet | | :--- | :--- | :--- | | Torrance, CA | Remanufacturing, Warehouse, Admin | 231,000 | | Tijuana, Mexico | Distribution Center and Office | 410,000 | | Tijuana, Mexico | Remanufacturing, Warehouse, Office | 312,000 | | Tijuana, Mexico | Remanufacturing, Warehouse, Office | 199,000 | | Tijuana, Mexico | Core Induction, Warehouse, Office | 173,000 | | Ontario, Canada | Remanufacturing, Warehouse, Office | 157,000 | [Legal Proceedings](index=22&type=section&id=Item%203.%20Legal%20Proceedings) The company is disputing a **$17 million** claim from U.S. Customs and Border Protection for additional duties on products imported from Mexico - U.S. Customs and Border Protection asserts the company owes approximately **$17 million in additional duties** for products imported from Mexico from 2011 to mid-2018, which the company disputes[117](index=117&type=chunk) [Mine Safety Disclosures](index=22&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=23&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on NASDAQ under MPAA, with **$1.14 million** in share repurchases in Q4 FY2021 and **$20.17 million** remaining in the repurchase program - The company's common stock trades on the **NASDAQ Global Select Market** under the symbol **MPAA**[120](index=120&type=chunk) Share Repurchase Activity (Q4 FY2021) | Period | Total Shares Purchased | Average Price Paid Per Share ($) | Dollar Value Remaining Under Program ($) | | :--- | :--- | :--- | :--- | | Feb 1 - Feb 28, 2021 | 54,960 | $20.72 | $20,169,000 | | **Total Q4** | **54,960** | **-** | **$20,169,000** | [Selected Financial Data](index=26&type=section&id=Item%206.%20Selected%20Financial%20Data) This section is intentionally left blank by the company - None [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses fiscal 2021 performance, noting **$540.8 million** in net sales, a gross margin decline to **20.2%**, strong operating cash flow of **$56.1 million**, and a **$71.8 million** debt reduction [Impact of COVID-19](index=27&type=section&id=Impact%20of%20COVID-19) The COVID-19 pandemic caused demand fluctuations and supply chain disruptions, leading to **$7.3 million** in related expenses in fiscal 2021, partially offset by **$1.3 million** in government assistance - In fiscal 2021, the company incurred **$7.316 million** in total COVID-19 related expenses[137](index=137&type=chunk) - The company received **$1.301 million** in government assistance payments from Canada and Asia to offset COVID-related costs[137](index=137&type=chunk) [Results of Operations](index=35&type=section&id=Results%20of%20Operations) Fiscal 2021 net sales increased to **$540.8 million**, gross margin declined to **20.2%** due to higher costs, and net income was **$21.5 million**, a turnaround from a **$7.3 million** loss in fiscal 2020 Fiscal Year 2021 vs. 2020 Performance | Metric | FY 2021 ($) | FY 2020 ($) | | :--- | :--- | :--- | | Net Sales | $540,782,000 | $535,831,000 | | Gross Profit | $109,461,000 | $118,400,000 | | Gross Profit % | 20.2% | 22.1% | | Net Income (Loss) | $21,476,000 | $(7,290,000) | - Gross profit in FY2021 was negatively impacted by **$5.268 million** in COVID-related costs and **$16.353 million** in Mexico operations transition expenses[191](index=191&type=chunk)[192](index=192&type=chunk) - The company recorded a non-cash gain of **$17.606 million** from foreign exchange impacts in FY2021, compared to an **$18.201 million** loss in FY2020[195](index=195&type=chunk)[199](index=199&type=chunk) Fiscal Year 2020 vs. 2019 Performance | Metric | FY 2020 ($) | FY 2019 ($) | | :--- | :--- | :--- | | Net Sales | $535,831,000 | $472,797,000 | | Gross Profit | $118,400,000 | $89,174,000 | | Gross Profit % | 22.1% | 18.9% | | Net (Loss) | $(7,290,000) | $(7,849,000) | [Liquidity and Capital Resources](index=39&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity improved in fiscal 2021 with operating cash flow increasing to **$56.1 million**, enabling a **$71.8 million** debt reduction, with **$125.3 million** available under the credit facility Cash Flow Summary (Fiscal Years 2019-2021) | Cash Flow Activity | FY 2021 ($) | FY 2020 ($) | FY 2019 ($) | | :--- | :--- | :--- | :--- | | **Operating Activities** | $56,089,000 | $18,795,000 | $(40,328,000) | | **Investing Activities** | $(14,214,000) | $(11,594,000) | $(22,610,000) | | **Financing Activities** | $(76,567,000) | $32,153,000 | $59,936,000 | - The company has a **$268.6 million** senior secured credit facility, with **$84.0 million** outstanding on the revolving facility and **$20.5 million** on the term loan as of March 31, 2021[226](index=226&type=chunk)[230](index=230&type=chunk)[419](index=419&type=chunk) - The company was in compliance with all financial covenants as of March 31, 2021, with a senior leverage ratio of **1.46** and a fixed charge coverage ratio of **1.26**[228](index=228&type=chunk)[229](index=229&type=chunk) Receivable Discount Program Summary (FY2021 vs FY2020) | Metric | FY 2021 ($) | FY 2020 ($) | | :--- | :--- | :--- | | Receivables Discounted | $491,285,000 | $461,484,000 | | Amount of Discount as Interest Expense | $9,513,000 | $14,780,000 | [Quantitative and Qualitative Disclosures About Market Risk](index=44&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks include interest rate fluctuations, foreign currency exposure, and customer credit concentration, with mitigation strategies in place - A hypothetical **1% increase in interest rates** would increase annual net interest expense by approximately **$1.045 million** on its **$104.5 million** net debt[244](index=244&type=chunk) - The company uses forward contracts to mitigate foreign currency risks, where a **10% adverse change** in exchange rates would have increased operating expenses by approximately **$3.932 million** at March 31, 2021[245](index=245&type=chunk) - In fiscal 2021, the company recorded a **$7.713 million gain** on forward currency contracts and a **$9.893 million gain** on remeasurement of foreign currency-denominated lease liabilities[245](index=245&type=chunk) [Financial Statements and Supplementary Data](index=45&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section refers to the consolidated financial statements and related notes, commencing on page F-1 - The required information is set forth in the consolidated financial statements, commencing on page F-1[247](index=247&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=45&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None [Controls and Procedures](index=45&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of March 31, 2021, with an unqualified audit opinion from Ernst & Young LLP - Management concluded that disclosure controls and procedures were effective at a reasonable assurance level as of March 31, 2021[250](index=250&type=chunk) - Management concluded that internal control over financial reporting was effective as of March 31, 2021, based on the COSO framework (2013)[253](index=253&type=chunk) - No material changes in internal control over financial reporting occurred during the period[255](index=255&type=chunk) [Other Information](index=46&type=section&id=Item%209B.%20Other%20Information) The company reports no other information for this item - None Part III [Directors, Executive Officers and Corporate Governance](index=47&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information for this item is incorporated by reference from the company's Definitive Proxy Statement - Information is incorporated by reference to the company's Proxy Statement[260](index=260&type=chunk) [Executive Compensation](index=47&type=section&id=Item%2011.%20Executive%20Compensation) Information for this item is incorporated by reference from the company's Definitive Proxy Statement - Information is incorporated by reference to the Proxy Statement[261](index=261&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=47&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information for this item is incorporated by reference from the company's Definitive Proxy Statement - Information is incorporated by reference to the Proxy Statement[262](index=262&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=47&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information for this item is incorporated by reference from the company's Definitive Proxy Statement - Information is incorporated by reference to the Proxy Statement[263](index=263&type=chunk) [Principal Accountant Fees and Services](index=47&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information for this item is incorporated by reference from the company's Definitive Proxy Statement - Information is incorporated by reference to the Proxy Statement[264](index=264&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=48&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists all documents filed as part of the Form 10-K report, including financial statements, schedules, and various exhibits - This item provides an index to the Consolidated Financial Statements and lists all exhibits filed with the report[266](index=266&type=chunk)[267](index=267&type=chunk) [Form 10-K Summary](index=52&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company has not provided a summary for this item - None Financial Statements [Consolidated Financial Statements](index=59&type=section&id=Consolidated%20Financial%20Statements) The audited consolidated financial statements for fiscal years 2019-2021 are presented, showing fiscal 2021 total assets of **$847.9 million**, net sales of **$540.8 million**, and net income of **$21.5 million** Consolidated Balance Sheet Highlights (As of March 31, 2021) | Account | Amount ($) | | :--- | :--- | | Total Current Assets | $422,856,000 | | Total Assets | $847,882,000 | | Total Current Liabilities | $326,131,000 | | Total Liabilities | $546,737,000 | | Total Shareholders' Equity | $301,145,000 | Consolidated Statement of Operations Highlights (Year Ended March 31, 2021) | Account | Amount ($) | | :--- | :--- | | Net Sales | $540,782,000 | | Gross Profit | $109,461,000 | | Operating Income | $46,633,000 | | Net Income | $21,476,000 | | Diluted EPS | $1.11 | - Ernst & Young LLP issued an unqualified opinion on the consolidated financial statements and the effectiveness of internal control over financial reporting as of March 31, 2021[286](index=286&type=chunk)[294](index=294&type=chunk) - Critical Audit Matters include the complexity of accounting for **'Contractual Agreements with Core Exchange Programs'** and the completeness of **'Marketing Allowances'**[298](index=298&type=chunk)[299](index=299&type=chunk)[302](index=302&type=chunk)