Financial Data and Key Metrics Changes - Net sales for Q3 2021 were $122.6 million, down from $125.6 million year-over-year, impacted by order delays of approximately $17 million due to COVID-19 challenges [22][27] - Gross profit for Q3 2021 was $24.2 million, compared to $27.7 million a year earlier, with gross profit as a percentage of net sales at 19.8% versus 22.0% [23] - Net income for Q3 2021 was $8.5 million or $0.44 per diluted share, compared to $865,000 or $0.04 per diluted share a year ago [26] - Cash flow from operations for Q3 2021 was $33.2 million, up from $22.3 million in Q3 2020 [30] - Net debt was reduced by 29.1% to $67.6 million from $94.4 million at September 30, 2020 [10][30] Business Line Data and Key Metrics Changes - The product mix for Q3 2021 consisted of 72% rotating electrical, 14% wheel hub, 12% brake products, and 2% others, with a decline in rotating electrical compared to the prior year [44] - The company built inventory to support anticipated strong demand for upcoming quarters [12] Market Data and Key Metrics Changes - The average age of the vehicle fleet reached approximately 12 years, leading to increased demand for parts replacement [14] - The company noted strong demand for used cars, as consumers prefer them over new cars during economic uncertainty [13] Company Strategy and Development Direction - The company is focused on enhancing its position as a premier supplier of automotive aftermarket parts in North America and emerging electric vehicle markets [15] - The company is optimistic about growth and profitability over the next several years, particularly in the electric vehicle and aerospace sectors [18] Management's Comments on Operating Environment and Future Outlook - Management indicated that while sales growth has been restrained by global supply chain challenges, bottom line performance is expected to benefit from enhanced operating efficiencies as the pandemic situation improves [17] - The company expects to see a recovery in demand and shipment volumes, particularly in January, with a double-digit increase anticipated [53] Other Important Information - The company has generated positive cash flow from operating activities for five consecutive quarters [31] - The company is optimistic about its electric vehicle subsidiary and its potential for growth [62] Q&A Session Summary Question: Details on the $17 million order delays - Management clarified that the delays were primarily due to supply chain challenges, not demand issues, with inventory reductions from customers pushing orders into January [40][41] Question: Gross margin fluctuations - Management indicated that the largest impact on gross margins was due to supply chain challenges and higher freight costs, with expectations for improved margins as revenues increase [48] Question: Cash generation sustainability - Management stated that cash flow generation will fluctuate based on sales levels and growth, but they believe they can continue to generate positive cash flow [59] Question: New product startup costs - Management expects startup costs to wind down by the first quarter of the next fiscal year, with some marginal expenses remaining [61] Question: Electric vehicle initiatives - Management expressed optimism about the electric vehicle space, indicating significant traction with top companies and potential for growth [102] Question: Accounts receivable drop - Management noted that the drop was primarily a timing phenomenon, with strong cash collections during the quarter [107]

[PART I — FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Unaudited financial statements detail the company's financial position, operations, and cash flows for the period ended December 31, 2020 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of December 31, 2020, total assets increased, driven by higher inventory and offset by lower cash, while debt was significantly reduced Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Dec 31, 2020 | Mar 31, 2020 | Change | | :--- | :--- | :--- | :--- | | **Assets** | | | | | Cash and cash equivalents | $12,800 | $49,616 | ($36,816) | | Accounts receivable — net | $45,271 | $91,748 | ($46,477) | | Inventory | $296,281 | $234,680 | $61,601 | | Total current assets | $395,108 | $409,116 | ($14,008) | | Total Assets | $799,236 | $777,029 | $22,207 | | **Liabilities & Equity** | | | | | Revolving loan | $59,000 | $152,000 | ($93,000) | | Total current liabilities | $298,826 | $318,492 | ($19,666) | | Total liabilities | $499,552 | $501,509 | ($1,957) | | Total shareholders' equity | $299,684 | $275,520 | $24,164 | [Condensed Consolidated Statements of Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Net income surged for the three and nine-month periods despite slightly lower sales, primarily due to significant foreign exchange gains Statement of Income Highlights (in thousands, except per share data) | Metric | Q3 FY2021 (3 mo ended 12/31/20) | Q3 FY2020 (3 mo ended 12/31/19) | YoY Change | 9 Months FY2021 (ended 12/31/20) | 9 Months FY2020 (ended 12/31/19) | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net Sales | $122,568 | $125,574 | -2.4% | $372,654 | $385,096 | -3.2% | | Gross Profit | $24,241 | $27,661 | -12.4% | $77,354 | $81,817 | -5.5% | | Operating Income | $15,893 | $9,246 | +71.9% | $41,163 | $22,230 | +85.2% | | Net Income | $8,469 | $865 | +879.1% | $20,641 | $903 | +2185.8% | | Diluted EPS | $0.44 | $0.04 | +1000% | $1.07 | $0.05 | +2040% | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow improved significantly, shifting from a net use to a source of cash, which was primarily used for debt repayment Cash Flow Summary (Nine Months Ended Dec 31, in thousands) | Cash Flow Category | 2020 | 2019 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $72,484 | ($4,410) | | Net cash used in investing activities | ($12,295) | ($9,650) | | Net cash (used in) provided by financing activities | ($97,734) | $13,546 | | **Net decrease in cash and cash equivalents** | **($36,816)** | **($453)** | - The company significantly paid down its revolving loan, with repayments of **$93.0 million** in the first nine months of fiscal 2021, compared to net borrowings in the prior year[26](index=26&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail the company's single reportable segment, high customer concentration, credit facility terms, and a customs duty dispute - The company's business comprises three operating segments, but they are aggregated into **one reportable segment** for financial reporting purposes[29](index=29&type=chunk) Significant Customer Concentration (as % of Net Sales) | Customer | Nine Months Ended 12/31/20 | Nine Months Ended 12/31/19 | | :--- | :--- | :--- | | Customer A | 42% | 39% | | Customer B | 24% | 21% | | Customer C | 21% | 23% | - The company is party to a **$268.6 million senior secured credit facility**, consisting of a $238.6 million revolving facility and a $30.0 million term loan, maturing in June 2023[53](index=53&type=chunk)[58](index=58&type=chunk) - The company uses forward foreign currency exchange contracts to mitigate risk from fluctuations in the Mexican peso and Chinese yuan, with a notional value of **$37.6 million** at quarter-end[76](index=76&type=chunk)[78](index=78&type=chunk) - The U.S. Customs and Border Protection has asserted that the company owes approximately **$17 million** in additional duties from 2011 to mid-2018, which the company disputes[101](index=101&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial results, highlighting COVID-19 impacts, decreased sales, lower gross margins, and improved liquidity used for debt repayment [Impact of the Novel Coronavirus (COVID-19)](index=25&type=section&id=Impact%20of%20the%20Novel%20Coronavirus%20(COVID-19)) The pandemic caused supply chain disruptions and increased costs, which were partially offset by government assistance payments - For the nine months ended Dec 31, 2020, the company incurred **$5,953,000 in COVID-19 related costs** for expanded benefits, supplies, and other expenses[112](index=112&type=chunk) - The company received government assistance payments totaling **$1,291,000** for the nine months ended Dec 31, 2020, which were recorded as a reduction of cost of goods sold and operating expenses[112](index=112&type=chunk) [Results of Operations](index=26&type=section&id=Results%20of%20Operations) Sales decreased due to supply chain disruptions, while gross margin fell from higher costs, but operating income was boosted by foreign exchange gains - Q3 FY2021 net sales were negatively impacted by order delays of approximately **$17,000,000** due to global supply chain and logistics disruptions related to COVID-19[117](index=117&type=chunk) Factors Impacting Q3 FY2021 Gross Profit (in thousands) | Item | Impact on Gross Profit | | :--- | :--- | | COVID-19 related costs | ($1,052) | | Mexico expansion transition expenses | ($4,217) | | Amortization of core premiums | ($1,528) | | Revised tariff costs benefit | $688 | - For the nine months ended Dec 31, 2020, net sales included **$12,779,000 in core revenue** from an inventory realignment at two customer distribution centers[131](index=131&type=chunk) - Interest expense for the nine months ended Dec 31, 2020, **decreased by 38.3% to $12.1 million** from $19.6 million in the prior year, due to lower interest rates and lower average debt balances[142](index=142&type=chunk) [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity strengthened with robust operating cash flow, enabling significant debt reduction while maintaining covenant compliance - Net cash provided by operating activities was **$72,484,000** for the nine months ended Dec 31, 2020, compared to net cash used of $4,410,000 in the prior-year period[148](index=148&type=chunk) - The company paid down its outstanding debt by **$95,813,000** during the nine months ended December 31, 2020[150](index=150&type=chunk)[155](index=155&type=chunk) Financial Covenant Compliance (as of Dec 31, 2020) | Covenant | Requirement | Actual Calculation | | :--- | :--- | :--- | | Maximum senior leverage ratio | ≤ 3.00 | 1.18 | | Minimum fixed charge coverage ratio | ≥ 1.10 | 1.24 | - As of December 31, 2020, **$21.3 million remained available** under the company's authorized share repurchase program[146](index=146&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company reports no material changes in its market risk exposures since its last Annual Report on Form 10-K - There have been **no material changes in market risk** since the company's Annual Report on Form 10-K as of March 31, 2020[171](index=171&type=chunk) [Item 4. Controls and Procedures](index=34&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective, with no material changes to internal controls - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were **effective** as of December 31, 2020[173](index=173&type=chunk) - **No changes occurred** during the quarter ended December 31, 2020, that materially affected or are reasonably likely to materially affect the company's internal control over financial reporting[178](index=178&type=chunk) [PART II — OTHER INFORMATION](index=36&type=section&id=PART%20II%20%E2%80%94%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings) There have been no material changes to the company's litigation matters since its last Annual Report - **No material changes** to litigation matters were reported since the last Annual Report on Form 10-K[180](index=180&type=chunk) [Item 1A. Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors disclosed in the company's last Annual Report - **No material changes** to risk factors were reported since the last Annual Report on Form 10-K[181](index=181&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=36&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No shares were repurchased during the quarter, with $21.3 million remaining available under the authorized program - The company **did not repurchase any of its equity securities** during the three months ended December 31, 2020[183](index=183&type=chunk) - As of December 31, 2020, **$21,308,000 remained available** under the company's $37,000,000 share repurchase program[183](index=183&type=chunk) [Item 5. Other Information](index=36&type=section&id=Item%205.%20Other%20Information) There was no other information to report for the period - **No information was reported** under this item[184](index=184&type=chunk) [Item 6. Exhibits](index=37&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including Sarbanes-Oxley certifications and Interactive Data Files

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, 2020 ☐ 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 2021 Results Conference Call August 10, 2020 1:00 PM ET Company Participants Gary Maier - IR Selwyn Joffe - Chairman, President and CEO David Lee - CFO Conference Call Participants Matt Koranda - Roth Capital Ryan Sigdahl - Craig-Hallum Capital Brian Nagel - Oppenheimer Scott Stember - CL King Sarkis Sherbetchyan - B. Riley Bill Dezellem - Tieton Capital Operator Ladies and gentlemen, thank you for standing by and welcome to the Motorcar Parts of America, Inc ...

FOR THE TRANSITION PERIOD FROM TO 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, 2020 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 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 ...

Investor Presentation – August 2020 ® motorcar parts of america, inc. "The Global Leader for Parts and Solutions That Move Our World Today and Tomorrow" Safe Harbor Statement 1 This presentation and any question and answer period or other communications afterwards may contain forward-looking statements with respect to the financial condition, results of operation and business of the company made pursuant to the safe harbor provisions of the Private Securities Litigation Act of 1995. These forward-looking st ...

Motorcar Parts of America, Inc. (NASDAQ:MPAA) Q4 2020 Earnings Conference Call June 15, 2020 1:00 PM ET Company Participants Gary Maier - Investor Relations Selwyn Joffe - Chairman, President and Chief Executive Officer David Lee - Chief Financial Officer Conference Call Participants Brian Nagel - Oppenheimer & Co. Ryan Sigdahl - Craig-Hallum Capital Scott Stember - CL King Associates Sarkis Sherbetchyan - B. Riley FBR William Dezellem - Tieton Capital Operator Ladies and gentlemen, thank you for standing ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 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, 2020 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 MOTORCAR PARTS OF AMERICA, INC. (Exact name of registrant as specified in its charter) | New York | 11-2153962 | | ...

PART I — FINANCIAL INFORMATION [Financial Statements (unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) Unaudited financial statements for December 31, 2019, reflect increased assets and liabilities, improved net income, and reduced operating cash outflow [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to **$726.7 million** by December 31, 2019, driven by higher inventory and new operating lease assets, with total liabilities also growing Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Dec 31, 2019 | Mar 31, 2019 | | :--- | :--- | :--- | | **Total Assets** | **$726,742** | **$632,362** | | Inventory - net | $256,482 | $233,726 | | Operating lease assets | $65,652 | - | | Long-term contract assets | $224,569 | $221,876 | | **Total Liabilities** | **$442,416** | **$352,607** | | Revolving loan | $130,000 | $110,400 | | Operating lease liabilities (Current & Long-term) | $66,796 | - | | **Total Shareholders' Equity** | **$284,326** | **$279,755** | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the three months ended December 31, 2019, net sales slightly increased, gross profit improved, and the company reported net income of **$865,000** Statement of Operations Summary (in thousands, except per share data) | Metric | Three Months Ended Dec 31, 2019 | Three Months Ended Dec 31, 2018 | Nine Months Ended Dec 31, 2019 | Nine Months Ended Dec 31, 2018 | | :--- | :--- | :--- | :--- | :--- | | Net sales | $125,574 | $124,113 | $385,096 | $343,720 | | Gross profit | $27,661 | $21,161 | $81,817 | $63,224 | | Operating income | $9,246 | $1,627 | $22,230 | $10,153 | | Net income (loss) | $865 | $(3,102) | $903 | $(5,084) | | Diluted EPS | $0.04 | $(0.16) | $0.05 | $(0.27) | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities significantly improved to **$4.4 million** for the nine months ended December 31, 2019, with financing activities providing **$13.5 million** Cash Flow Summary (Nine Months Ended Dec 31, in thousands) | Cash Flow Activity | 2019 | 2018 | | :--- | :--- | :--- | | Net cash used in operating activities | $(4,410) | $(20,328) | | Net cash used in investing activities | $(9,650) | $(13,244) | | Net cash provided by financing activities | $13,546 | $29,290 | | **Net decrease in cash and cash equivalents** | **$(453)** | **$(4,458)** | [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Key notes detail the adoption of ASC 842, significant customer concentration, and a pending **$17 million** customs duty claim - The company adopted the new lease guidance (ASC 842) on April 1, 2019, recording operating lease liabilities of **$53.0 million** and corresponding assets of **$50.8 million**[34](index=34&type=chunk) Significant Customer Concentration (as % of Net Sales) | Customer | Nine Months Ended Dec 31, 2019 | Nine Months Ended Dec 31, 2018 | | :--- | :--- | :--- | | Customer A | 39% | 36% | | Customer B | 21% | 23% | | Customer C | 23% | 23% | - The company is disputing a claim from U.S. Customs and Border Protection for approximately **$17 million** in additional duties from 2011 through mid-2018[93](index=93&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses a **12.0%** increase in net sales, improved gross margins, and increased operating expenses, with liquidity supported by an amended credit facility [Results of Operations](index=28&type=section&id=Results%20of%20Operations) Q3 net sales rose **1.2%** to **$125.6 million**, driven by new products and acquisitions, with gross margin expanding to **22.0%** due to product mix - For Q3 FY2020, the introduction of brake calipers contributed **$6.9 million** in net sales, and acquisitions from fiscal 2019 added **$6.1 million**[104](index=104&type=chunk) - Q3 gross profit margin improved by **5.0 percentage points** year-over-year, primarily due to a change in product mix and a smaller non-cash revaluation write-down of cores[105](index=105&type=chunk) - For the nine months ended Dec 31, 2019, net sales increased by **$41.4 million (12.0%)**, with acquisitions contributing **$17.3 million** and the new brake caliper line adding **$11.5 million**[115](index=115&type=chunk) [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) Working capital was **$75.1 million** as of December 31, 2019, with liquidity supported by an amended **$238.6 million** revolving credit facility and receivable discount programs - In June 2019, the company amended its credit facility, increasing the revolving loan facility from **$200.0 million** to **$238.6 million**[124](index=124&type=chunk)[132](index=132&type=chunk) - At December 31, 2019, the company had **$130.0 million** outstanding under its revolving facility and **$73.8 million** available for borrowing[136](index=136&type=chunk) - The company's share repurchase program had **$21.3 million** remaining available as of December 31, 2019, though no shares were repurchased during the quarter[126](index=126&type=chunk)[165](index=165&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=36&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes in market risk exposures have occurred since the Annual Report on Form 10-K for the fiscal year ended March 31, 2019 - There have been no material changes in market risk since the Annual Report on Form 10-K as of March 31, 2019[148](index=148&type=chunk) [Controls and Procedures](index=36&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls were ineffective due to a material weakness in internal control over financial reporting, with remediation efforts underway - Management concluded that disclosure controls and procedures were not effective as of December 31, 2019, due to a previously identified material weakness[149](index=149&type=chunk) - The material weakness stems from an insufficient review of accounting policies and a lack of technical accounting resources, leading to inconsistent application and inadequate analysis[156](index=156&type=chunk) - Remediation efforts are underway, including hiring more experienced personnel and enhancing training and monitoring, with a target completion before the end of fiscal year 2020[152](index=152&type=chunk)[153](index=153&type=chunk) PART II — OTHER INFORMATION [Legal Proceedings](index=39&type=section&id=Item%201.%20Legal%20Proceedings) No material changes to litigation matters have occurred since the Annual Report on Form 10-K for the fiscal year ended March 31, 2019 - No material changes to litigation matters have occurred since the last annual report[162](index=162&type=chunk) [Risk Factors](index=39&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors have occurred since the Annual Report on Form 10-K for the fiscal year ended March 31, 2019 - No material changes to risk factors have occurred since the last annual report[163](index=163&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=39&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No equity securities were repurchased during the quarter, with **$21.3 million** remaining available under the authorized share repurchase program - No shares were repurchased during the three months ended December 31, 2019[165](index=165&type=chunk) - As of December 31, 2019, **$21.3 million** remained available under the company's authorized share repurchase program[165](index=165&type=chunk) [Other Information](index=39&type=section&id=Item%205.%20Other%20Information) No additional material information is reported for this item - None[166](index=166&type=chunk) [Exhibits](index=40&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including corporate governance documents and Sarbanes-Oxley Act certifications - Exhibits filed with this report include certifications from the Chief Executive Officer, Chief Financial Officer, and Chief Accounting Officer as required by Sections 302 and 906 of the Sarbanes-Oxley Act[169](index=169&type=chunk)

Financial Data and Key Metrics Changes - Net sales for Q3 2020 increased to $125.6 million from $124.1 million year-over-year, with adjusted net sales rising to $127.7 million from $119.6 million [25] - Gross profit for Q3 2020 was $27.7 million, up from $21.2 million a year earlier, with gross profit as a percentage of net sales increasing to 22% from 17% [26] - Adjusted net income for Q3 2020 was $5.5 million or $0.28 per diluted share, compared to $6.7 million or $0.35 per share a year ago [34] Business Line Data and Key Metrics Changes - The company is focusing on maintaining growth rates in hard parts categories and launching into the multi-billion dollar brake parts category [14] - The facility expansion in Malaysia is substantially complete, allowing for increased capacity and reduced dependence on outsourcing [11] Market Data and Key Metrics Changes - The market for internal combustion engine vehicles in the U.S. is projected to increase by 36 million from 2020 to 2030, which will drive growth in the aftermarket parts replacement industry [12] - The company expects to generate approximately $534 million in net sales for fiscal 2020, representing a 13% year-over-year growth [20] Company Strategy and Development Direction - The company is executing strategic investments to create a transformative platform for growth and profitability within the $125 billion aftermarket hard parts industry [8] - The strategy includes leveraging channel relationships for aftermarket parts and expanding into electric vehicle diagnostics and testing [16] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about the outlook for current and expanding product lines, despite short-term softness in demand due to mild weather and deferred orders [21] - The company expects continued year-over-year sales increases and improved adjusted gross margins and operating income for fiscal 2020 [18] Other Important Information - The company has established itself as a leader in supplying internal combustion vehicle hard parts, with significant growth expected in the aftermarket parts replacement industry [12] - The company has a net bank debt of approximately $145.6 million and total cash availability of about $83.2 million as of December 31, 2019 [38] Q&A Session Summary Question: Can you provide more detail on specifics driving the revenue mix? - Management indicated that nearly all underperformance was due to the deferral of over $12 million in product orders, which are expected to hit in future quarters [46] Question: How do you see the impact of the coronavirus on supply chains? - Management stated there has been no effect from the coronavirus as of now, but there are risks associated with unique update orders and componentry sourced from China [58] Question: What are the expectations for the new brake caliper line? - Management expects revenue from calipers to be closer to $25 million to $30 million, depending on order timing [63] Question: How do you feel about capacity and CapEx needs for fiscal 2021? - Management indicated that CapEx will drop dramatically as facilities are completed, and they are well set up to handle expected growth [54] Question: What is the company's plan for debt repayment moving forward? - Management plans to minimize outstanding debt from the revolver and will consider capital allocation for shareholder value once stable positive cash flows are achieved [72]