LOS ANGELES — Motorcar Parts of America (MPA) has reported a 27 percent increase in sales for its fiscal 2009 third quarter — due primarily to an aging vehicle population and demand for its non-discretionary automotive aftermarket components.
Net sales for the fiscal 2009 third quarter ended Dec. 31, 2008 were $35.8 million compared with $28.2 million for the same period last year. Gross profit for the fiscal 2009 third quarter increased 35.3 percent to $10.1 million from $7.5 million for the same period a year ago. Gross margin was 28.3 percent for the fiscal 2009 third quarter compared with 26.6 percent a year earlier, due primarily to increased sales, lower manufacturing costs and increased operating efficiencies — which were partially offset by the impact of a significant reduction in scrap metal commodity prices in the fiscal 2009 third quarter.
Operating income for the fiscal 2009 third quarter was $509,000 compared with $842,000 a year ago — reflecting the impact of a non-cash goodwill impairment charge of $2.1 million, or 11 cents per diluted share, and a non-cash charge of $1.35 million, or 7 cents per diluted share, recorded in general and administrative expenses to adjust for a significant decline in the value of the Mexican Peso as it related to foreign exchange currency contracts.
As a result of the items noted above, the company reported a net loss for its fiscal 2009 third quarter of $314,000, or 3 cents per share, compared with a net loss of $183,000, or 2 cents per share, for the comparable period a year earlier.
Net sales for the fiscal 2009 nine-month period were $104.9 million compared with $97.4 million a year ago. Gross profit for the fiscal 2009 nine-month period was $33.5 million compared with $25.9 million a year earlier, with gross margin of 31.9 percent and 26.6 percent for the fiscal 2009 and fiscal 2008 nine-month periods, respectively.
Operating income for the same period increased 51 percent to $11.3 million from $7.5 million a year earlier, despite being impacted by a non-cash charge of $1.7 million, or 9 cents per diluted share, due to the significant decline in the value of the Mexican Peso, and the $2.1 million non-cash goodwill impairment charge, as described above.
Net income for the fiscal 2009 nine-month period increased sharply to $5 million, or 42 cents per diluted share, from $1.9 million, or 16 cents per diluted share, a year ago.
"Recent industry reports indicate there are bright spots within the automotive aftermarket sector as consumers delay new car purchases. This clearly bodes well for non-discretionary aftermarket parts, such as alternators and starters, and we look forward to further market expansion opportunities from current and new customers, as well as contributions from appropriate acquisitions that would benefit from the company’s available capacity and low-cost manufacturing structure," said Selwyn Joffe, chairman, president and chief executive officer of Motorcar Parts.
"Unfortunately, our fiscal 2009 third quarter results were impacted by current stock market conditions that resulted in the company’s market capitalization being significantly less than book value. Under applicable accounting standards, this situation has resulted in a non-cash write-off of our goodwill — resulting in a net loss for the quarter. Other than the two non-cash write-downs, the company experienced a very strong third quarter," Joffe said.
Joffe noted the company’s third quarter resulted in net cash generated by operating activities of $5.9 million.
Separately, the company announced its credit agreement with Union Bank, NA has been extended to April 15, 2010. At Dec. 31, 2008, the balance of the revolving loan was $14.4 million after a $3.2 million pay-down by the company during the quarter.
MPA also announced the appointment of Jeffrey Mirvis to its board of directors, succeeding Irv Siegel who recently resigned, as previously announced.
The appointment brings the company in compliance with NASDAQ Marketplace Rule, which requires that a majority of the board of directors be comprised of independent members. The process of selecting Jeffrey Mirvis was led by a committee comprised of three independent directors.
"Jeff Mirvis brings to the company a wealth of experience, particularly product manufacturing and logistics. Our operations in Malaysia and Singapore, as well as relationships with suppliers in the region, complement Jeff’s experience and knowledge within Asia and in North America. His extensive expertise, which includes working with multi-national customers, will be invaluable for our existing and future business. In addition, Jeff’s knowledge and relationships within the commercial banking sector will be extremely useful as our organization grows. We look forward to benefiting from his advice as the company focuses on domestic business expansion and foreign opportunities," said Joffe.
Mirvis is currently the chief executive officer of MTG Industries, a privately held apparel company based in Los Angeles, assuming the position in 2000. Prior to joining MTG Industries in 1990, he served as a banker with Union Bank of California.
He earned a bachelor of arts degree in economics from the University of California at Santa Barbara. He is involved in numerous educational and charitable organizations in Los Angeles.
