Motorcar Parts of America(US:MPAA)2025-11-10 21:00Financial Performance - Consolidated net sales for the three months ended September 30, 2025, were $221,470,000, an increase of $13,284,000, or 6.4%, from $208,186,000 in the same period of 2024[115] - Gross profit for the three months ended September 30, 2025, was $42,727,000, representing a gross margin of 19.3%, compared to $41,277,000 and 19.8% in 2024[116] - Operating income for the three months ended September 30, 2025, was $16,371,000, an increase from $12,520,000 in the same period of 2024[123] - Consolidated net sales for the six months ended September 30, 2025, were $409,834,000, an increase of $31,761,000, or 8.4%, from $378,073,000 in 2024[130] - Consolidated operating income increased to $36,440,000 for the six months ended September 30, 2025, compared to $6,064,000 for the same period in 2024[137] Cash Flow and Expenses - Cash flow provided by operations for the six months ended September 30, 2025, was $31,893,000, a significant increase from $2,011,000 in 2024[128] - Sales and marketing expenses increased by $1,738,000, or 15.4%, to $13,021,000 for the six months ended September 30, 2025, compared to $11,283,000 for the same period in 2024[134] - Research and development expenses for the three months ended September 30, 2025, were $3,928,000, an increase of $1,485,000, or 60.8%, from $2,443,000 in 2024[121] - Research and development expenses rose by $2,358,000, or 48.4%, to $7,234,000 for the six months ended September 30, 2025, from $4,876,000 in 2024[135] - General and administrative expenses for the three months ended September 30, 2025, were $17,086,000, an increase of $2,034,000, or 13.5%, from $15,052,000 in 2024[119] Tax and Interest - The effective tax rate for the three months ended September 30, 2025, was 252.2%, compared to (44.7)% in 2024, primarily impacted by changes in valuation allowance on deferred tax assets[126] - The effective tax rate for the six months ended September 30, 2025, was 87.0%, compared to an effective tax rate of (3.6)% in 2024[140] - Interest expense for the three months ended September 30, 2025, was $12,699,000, a decrease of $1,483,000, or 10.5%, from $14,182,000 in 2024[124] - Interest expense decreased by $3,058,000, or 10.7%, to $25,511,000 for the six months ended September 30, 2025, from $28,569,000 in 2024[138] Inventory and Capital Expenditures - Finished goods turnover (annualized) for the three months ended September 30, 2025, was 4.8, up from 4.1 in 2024[114] - Total capital expenditures were $3,866,000 for the six months ended September 30, 2025, up from $1,219,000 in 2024[158] - The company expects to incur approximately $7,000,000 in capital expenditures during fiscal 2026 to support global growth initiatives[158] Corporate Governance and Compliance - The Board appointed Douglas Trussler as a director in connection with the issuance of Convertible Notes on March 31, 2023[160] - The company is evaluating the impact of new accounting standards issued by the FASB, including ASU 2023-06 and ASU 2023-09, which will affect financial statement disclosures starting in fiscal years after December 15, 2024[163][164] - The FASB issued ASU 2024-03, requiring the disaggregation of income statement expenses, effective for annual reporting periods beginning after December 15, 2026[165] - The company is assessing the implications of ASU 2025-05 regarding the measurement of credit losses for accounts receivable, effective for annual periods beginning after December 15, 2025[167] - There have been no material changes in market risk from the previous disclosures in the Annual Report on Form 10-K as of March 31, 2025[169] Lease and Rent Expenses - The company renewed its operating lease for a 35,000 square foot facility in Ontario, Canada, for an additional three-year period starting January 1, 2025, with rent expenses of $94,000 and $81,000 for the three months ended September 30, 2025 and 2024, respectively[159] - The company recorded rent expenses of $187,000 and $162,000 for the six months ended September 30, 2025 and 2024, respectively[159]