Motorcar Parts of America(MPAA) - 2025 Q2 - Quarterly Results

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].