Motorcar Parts of America(US:MPAA)2024-11-12 21:02Financial 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]