LOS ANGELES — Motorcar Parts of America (MPA) has reported results for its 2010 fiscal second quarter, supported by increased demand for alternator and starter replacements and the benefits of a gain from the recent acquisition of Reliance Automotive.
Net income for the fiscal 2010 second quarter ended Sept. 30 increased 48 percent to $3.4 million, or 28 cents per diluted share, compared with $2.3 million or 19 cents per diluted share, a year ago. Results for the fiscal 2010 second quarter included a $1.3 million gain, or 7 cents per diluted share, related to the company’s acquisition of Reliance Automotive completed in August.
Net sales for the fiscal 2010 second quarter increased 8.2 percent to $39.4 million compared with $36.4 million for the same period last year. This increase was primarily due to net sales to new customers acquired in the recent acquisition of Reliance Automotive and other increases in net sales. In addition, net sales for the quarter benefited from the recognition of $845,000 of previously deferred core revenue due to entering into a new customer contract.
Gross profit for the fiscal 2010 second quarter was $10.8 million compared with $11.9 million for the same period a year ago. Gross profit as a percentage of net sales for the second quarter was 27.4 percent compared with 32.7 percent a year ago and 21.9 percent in the fiscal 2010 first quarter.
For the fiscal 2010 six-month period, net income was $4.6 million, or 38 cents per diluted share, compared with $5.4 million, or 44 cents per diluted share, a year earlier. Net sales for the six months were $72.1 million compared with $69.1 million a year ago.
Gross profit for the fiscal 2010 six-month period was $18 million compared with $23.4 million for the same period a year ago. Gross profit as a percentage of net sales for the fiscal 2010 six-month period was 24.9 percent compared with 33.8 percent a year ago. The six-month period a year earlier benefited from the reversal of a $1.3 million accrual related to customs duty claims; higher scrap metal revenues of $1.3 million; lower packaging costs, a lower provision for inventory reserves and other lower period costs. In addition, gross profit for the fiscal 2009 six-month period was positively impacted by an acceleration of promotional allowances in the fourth quarter of fiscal 2008, caused by an amendment to a customer agreement, which otherwise would have been earned by a customer during fiscal 2009 of $1.5 million.
"Results for the quarter highlight the strength of the sales momentum that started late in the first quarter, as well as initial sales contributions derived from a recent acquisition that offers additional growth opportunities," said Selwyn Joffe, chairman, president and chief executive officer of Motorcar Parts. "We continue to be encouraged by the volume of business from existing and new customers and remain focused on capitalizing on our manufacturing capacity and operating leverage to increase profitability," Joffe added.
Joffe also highlighted the company’s recently announced new credit facility and said he anticipated further balance sheet improvements as complementary to Motorcar Parts of America’s strategy to grow organically and through acquisitions.
