Motorcar Parts of America(MPAA) - 2026 Q2 - Quarterly Results

Financial Performance - Net sales for the fiscal 2026 second quarter increased by $13.3 million, or 6.4%, to $221.5 million from $208.2 million in the prior year[4] - Gross profit reached a record $42.7 million, up 3.5% from $41.3 million a year earlier, with a gross margin of 19.3% compared to 19.8% in the prior year[5] - Operating income increased by 30.8% to $16.4 million from $12.5 million in the prior year[5] - For the six-month period, net sales increased by $31.8 million, or 8.4%, to a record $409.8 million from $378.1 million[12] - Gross profit for the six-month period increased to a record $76.6 million from $70.5 million a year earlier, with a gross margin of 18.7% compared to 18.6% in the prior year[13] - GAAP net loss for the three months ended September 30, 2025, was $2,149,000, compared to a net loss of $2,954,000 for the same period in 2024, showing an improvement of 27.2%[30] - GAAP gross profit for the three months ended September 30, 2025, was $42,727,000, with a gross margin of 19.3%, slightly down from $41,277,000 and 19.8% in 2024[34] - GAAP net loss for Q3 2025 was $2,149,000, an improvement from a loss of $2,954,000 in Q3 2024[36] Cash Flow and Debt Management - Generated $21.9 million of cash from operating activities and reduced net bank debt by $17.7 million to $56.7 million[6] - Interest expense decreased by $1.5 million to $12.7 million from $14.2 million a year ago, reflecting lower average outstanding balances and interest rates[7] - Interest expense for the first half of 2025 was $25,511,000, down from $28,569,000 in the same period of 2024[36] Shareholder Value and Equity - The company repurchased 90,114 shares for $1.4 million at an average price of $15.41 during the fiscal 2026 second quarter[16] - The company anticipates further opportunities to enhance shareholder value through improved profitability and strong cash generation[16] - The company reported a GAAP net income of $893,000 for the six months ended September 30, 2025, contrasting with a net loss of $21,039,000 in the same period of 2024[32] - The company’s retained earnings increased to $20,926,000 as of September 30, 2025, up from $20,033,000 on March 31, 2025, indicating a growth of 4.4%[26] Asset and Liability Management - Total assets increased to $989,968,000 as of September 30, 2025, up from $957,636,000 on March 31, 2025, representing a growth of 3.9%[26] - Total current assets rose to $546,732,000 as of September 30, 2025, compared to $511,471,000 on March 31, 2025, marking an increase of 6.9%[26] - Total liabilities increased to $731,432,000 as of September 30, 2025, up from $699,937,000 on March 31, 2025, reflecting a rise of 4.5%[26] Non-Cash and Cash Items Impacting Income - Non-cash items impacting net income for the three months ended September 30, 2025, totaled $4,759,000, compared to $7,957,000 in 2024[30] - Cash items impacting net income for the six months ended September 30, 2025, amounted to $1,593,000, compared to $3,328,000 in 2024[32] - Total non-cash items impacting EBITDA for Q3 2025 amounted to $6,345,000, compared to $10,609,000 in Q3 2024[36] - Cash items impacting EBITDA for Q3 2025 totaled $698,000, while Q3 2024 recorded $1,498,000[36] Expenses and Cost Management - Depreciation and amortization expenses for the first half of 2025 were $4,822,000, down from $5,330,000 in the same period of 2024[36] - Core and finished goods premium amortization for Q3 2025 was $2,988,000, an increase from $2,621,000 in Q3 2024[36] - Share-based compensation expenses rose to $1,984,000 in Q3 2025, compared to $1,016,000 in Q3 2024[36] - The company incurred net tariff costs of $698,000 for products sold before price increases were effective in Q3 2025[36] - The company reported a significant foreign exchange impact of lease liabilities and forward contracts, with a negative effect of $(1,469,000) in Q3 2025[36] EBITDA Performance - EBITDA for the six months ended September 30, 2025, was positively impacted by a change in fair value of compound net derivative liability amounting to $4,050,000[32] - EBITDA for Q3 2025 increased to $16,484,000, up 11.8% from $14,741,000 in Q3 2024[36]