Motorcar Parts of America(MPAA) - 2025 Q4 - Annual Results

Financial Performance - Net sales for fiscal 2025 increased 5.5% to a record $757.4 million from $717.7 million in the prior year[12] - Gross profit for fiscal 2025 increased 16.1% to a record $153.8 million from $132.6 million a year earlier, with a gross margin of 20.3% compared to 18.5%[13] - Net loss for fiscal 2025 was $19.5 million, or $0.99 per share, an improvement from a net loss of $49.2 million, or $2.51 per share, in the prior year[15] - Operating income for fiscal 2026 is expected to be between $86 million and $91 million, representing 4.3% to 10.4% year-over-year growth[18] - The company expects fiscal 2026 net sales to be between $780 million and $800 million, representing 3.0% to 5.6% year-over-year growth[18] Cash Flow and Debt Management - Generated cash from operating activities of $45.5 million and reduced net bank debt by $32.6 million to $81.4 million[11] - Interest expense decreased by $4.5 million for fiscal 2025 to $55.6 million from $60.0 million a year ago[14] - The company repurchased 542,134 shares for $4.8 million during fiscal 2025, supported by strong cash generation[17] Assets and Liabilities - Total assets decreased from $1,012,002,000 in 2024 to $957,636,000 in 2025, a decline of approximately 5.4%[28] - Total current liabilities decreased from $404,425,000 in 2024 to $351,025,000 in 2025, a reduction of approximately 13.2%[28] - Total liabilities decreased from $726,892,000 in 2024 to $699,937,000 in 2025, a reduction of approximately 3.7%[28] - The company’s retained earnings fell from $39,503,000 in 2024 to $20,033,000 in 2025, a decrease of approximately 49.3%[28] Operational Costs and Expenses - Cash items impacting net income for the three months ended March 31, 2025 totaled $3,575,000, compared to $1,180,000 in 2024, indicating increased operational costs[32] - Share-based compensation expenses increased to $868,000 in Q1 2025 from $432,000 in Q1 2024[38] - The company incurred new product line start-up costs of $160,000 in Q1 2025, compared to $840,000 in Q1 2024[38] Supply Chain and Geopolitical Challenges - The company has reduced its reliance on Chinese suppliers to less than 25% and is leveraging its North American footprint for further reductions[10] - The company is addressing current geopolitical challenges, specifically tariffs and pricing, to support its competitive position and anticipated future growth[9] - Tariff costs paid for products sold before price increases were effective totaled $4,607,000 in Q1 2025, with no costs reported in Q1 2024[38] - Supply chain disruptions and related costs were recorded as $734,000 in Q1 2024, with no such costs reported in Q1 2025[38] Earnings and EBITDA - GAAP net loss for the three months ended March 31, 2025 was $722,000, compared to a net income of $1,338,000 in 2024, representing a significant turnaround[32] - EBITDA for the twelve months ended March 31, 2025 was impacted by non-cash items totaling $25,029,000, contributing to a net loss of $19,470,000[34] - EBITDA for Q1 2025 was $16,296,000, a decrease from $17,703,000 in Q1 2024, while the twelve-month EBITDA decreased from $58,591,000 to $50,263,000[38] - Non-cash items impacting EBITDA totaled $3,528,000 in Q1 2025, significantly higher than $301,000 in Q1 2024[38]