Motorcar Parts of America(US:MPAA)2026-02-09 12:58Financial Performance - Net sales for the fiscal 2026 third quarter were $167.7 million, down from $186.2 million in the prior year, reflecting a decrease of approximately $17 million due to reduced ordering from a large customer[3]. - Gross profit for the fiscal 2026 third quarter was $32.9 million, compared to $44.9 million a year earlier, resulting in a gross margin of 19.6%, down from 24.1%[4]. - Operating income for the fiscal 2026 third quarter was $8.3 million, a decrease from $17.6 million in the prior year, while interest expense decreased by $3.5 million to $10.9 million[6]. - Net income for the fiscal 2026 third quarter was $1.8 million, or $0.09 per diluted share, compared to $2.3 million, or $0.11 per diluted share, in the prior year[7]. - For the nine-month period, net sales increased by $13.3 million, or 2.4%, to $577.5 million, despite a $40 million decrease from the previously noted customer[12]. - Gross profit for the nine-month period was $109.5 million, with a gross margin of 19.0%, down from 20.4% a year earlier[14]. - GAAP net income for the three months ended December 31, 2025, was $1.78 million, or $0.09 per diluted share, compared to $2.29 million, or $0.11 per diluted share for the same period in 2024, reflecting a decrease of 22.4%[32]. - For the nine months ended December 31, 2025, GAAP net income was $2.67 million, or $0.13 per diluted share, a recovery from a loss of $18.75 million, or $(0.95) per diluted share in 2024[33]. - GAAP gross profit for the three months ended December 31, 2025, was $32.88 million, with a gross margin of 19.6%, down from $44.88 million and a gross margin of 24.1% in 2024[35]. - The company reported a GAAP gross profit of $109.52 million for the nine months ended December 31, 2025, with a gross margin of 19.0%, down from $115.33 million and a margin of 20.4% in 2024[36]. Cash Flow and Debt Management - The company generated cash of approximately $23.7 million for the nine-month period and reduced net bank debt by $10.9 million to $70.5 million[10]. - Cash items impacting net income for the nine months ended December 31, 2025, amounted to $1.89 million, compared to $3.33 million in 2024, showing a decrease in cash-related impacts[33]. - Total current liabilities increased to $390.79 million as of December 31, 2025, from $351.03 million on March 31, 2025, marking an increase of 11.3%[28]. - The company’s total liabilities rose to $732.76 million as of December 31, 2025, compared to $699.94 million on March 31, 2025, reflecting a growth of 4.7%[28]. - The company’s retained earnings increased to $22.70 million as of December 31, 2025, up from $20.03 million on March 31, 2025, indicating a growth of 13.3%[28]. Future Outlook - The company is revising its fiscal 2026 sales guidance to between $750 million and $760 million, with operating income expected to be between $72 million and $79 million[19]. - The company anticipates further opportunities to enhance shareholder value through improved profitability and a return to normal ordering activity[18]. - Significant new business commitments are expected due to changes in the competitive landscape, including the bankruptcy of a competitor and increased demand for replacement parts[5]. Non-Cash and Other Financial Items - Non-cash items impacting net income for the three months ended December 31, 2025, totaled $313,000, compared to $4.96 million in 2024, indicating a significant reduction in non-cash impacts[32]. - Total non-cash items impacting EBITDA for Q3 2025 amounted to $418,000, significantly lower than $6,615,000 in Q3 2024[37]. - The company incurred new product line start-up costs of $397,000 in Q3 2025, compared to $4,438,000 in the same quarter of the previous year[37]. - Depreciation and amortization for Q3 2025 was $2,359,000, slightly down from $2,532,000 in Q3 2024[37]. - Income tax expense for Q3 2025 was $(434,000), a significant decrease from $1,115,000 in Q3 2024[37]. EBITDA Performance - EBITDA for Q3 2025 was $14,603,000, down from $20,373,000 in Q3 2024, representing a decline of approximately 28%[37]. - Total EBITDA for the nine months ended December 31, 2025 was $51,815,000, an increase from $33,967,000 in the same period of 2024[37].