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Motorcar Parts of America(MPAA) - 2025 Q2 - Quarterly Report
MPAAMotorcar Parts of America(MPAA)2024-11-12 21:02
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Financial Performance - Consolidated net sales for the three months ended September 30, 2024, were 208,186,000,anincreaseof208,186,000, an increase of 11,547,000, or 5.9%, from 196,639,000forthesameperiodin2023[95]−GrossprofitforthethreemonthsendedSeptember30,2024,was196,639,000 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,comparedto12,520,000, 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,anincreaseof378,073,000, an increase of 21,729,000, or 6.1%, from 356,344,000forthesameperiodin2023[109]−GrossprofitforthesixmonthsendedSeptember30,2024,was356,344,000 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 6,064,000forthesixmonthsendedSeptember30,2024,downfrom6,064,000 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,asignificantimprovementfromacashoutflowof2,011,000, 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,anincreaseof15,052,000, an increase of 727,000, or 5.1%, from 14,325,000inthesameperiodof2023[99]−Generalandadministrativeexpensesincreasedby14,325,000 in the same period of 2023[99] - General and administrative expenses increased by 4,795,000, or 17.8%, to 31,722,000forthesixmonthsendedSeptember30,2024,comparedto31,722,000 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,adecreaseof14,182,000, a decrease of 1,201,000, or 7.8%, from 15,383,000inthesameperiodof2023[103]−Interestexpenseincreasedby15,383,000 in the same period of 2023[103] - Interest expense increased by 1,466,000, or 5.4%, to 28,569,000forthesixmonthsendedSeptember30,2024,comparedto28,569,000 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 2,686,000forthethreemonthsendedSeptember30,2024[111]FinancialPosition−Thecompanyhadworkingcapitalof2,686,000 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 18,745,000ofits18,745,000 of its 37,000,000 share repurchase program as of September 30, 2024[125] - Receivables discounted under accounts receivable discount programs increased to 303,638,000forthesixmonthsendedSeptember30,2024,from303,638,000 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 26,487,000ofoutstandingsupplierobligationsconfirmedasvalidunderthesupplierfinanceprogram,includedinaccountspayableandaccruedliabilities[140]MarketandRiskAssessment−Foreignexchangeimpactofleaseliabilitiesandforwardcontractsresultedinnon−cashlossesof26,487,000 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 490,000inthesameperiodof2023[115]−Thechangeinfairvalueofthecompoundnetderivativeliabilityresultedinanon−cashgainof490,000 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 530,000inthesameperiodof2023[119]−AsofSeptember30,2024,530,000 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,comparedto1,219,000, 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]