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Motorcar Parts Of America Reports Fiscal 2020 Q3 Results

Motorcar Parts of America Inc. (MPA) has reported results for its fiscal 2020 third quarter ended Dec. 31, 2019 – reflecting profitability, generation of cash flow from operations of $22 million during the fiscal third quarter and margin improvement.

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Net sales for the fiscal 2020 third quarter increased to $125.6 million for a record third quarter from $124.1 million for the same period a year earlier.

Adjusted net sales for the fiscal 2020 third quarter increased to $127.7 million for a record third quarter from $119.6 million a year earlier.

“Notwithstanding industry sales softness and the deferral of certain product orders late in the quarter, we achieved record sales and generated record cash flow from operations and improved margins. Our strategic investments are creating a transformative platform for growth, as we expand our position within the $125 billion aftermarket hard parts industry,” said Selwyn Joffe, chairman, president and CEO of Motorcar Parts of America.

Net income for the fiscal 2020 third quarter was $865,000, or 4 cents per diluted share, compared with net loss of $3.1 million, or 16 cents per share, a year ago.

Adjusted net income for the fiscal 2020 third quarter was $5.5 million, or 28 cents per diluted share, compared with $6.7 million, or 35 cents per diluted share, a year earlier.

Gross profit for the fiscal 2020 third quarter was $27.7 million compared with $21.2 million a year earlier. Gross profit as a percentage of net sales for the fiscal 2020 third quarter was 22 percent compared with 17 percent a year earlier. 

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Adjusted gross profit for the fiscal 2020 third quarter was $34.3 million compared with $30.9 million a year ago. Adjusted gross profit as a percentage of adjusted net sales for the three months was 26.9 percent compared with 25.8 percent a year earlier. 

The results for the fiscal 2020 third quarter gross margin were primarily impacted by two items totaling $5.8 million.

• Non-cash expenses of $3.7 million, including a write-down of $2.4 million associated with the quarterly revaluation for cores on customers’ shelves, and $1.3 million of amortization related to the premium for core buy backs.

• Transition costs of $2.1 million associated with the move into the company’s new facilities in Mexico to support the growth in sales.

“Our footprint of the future is rapidly evolving and we expect to realize incremental benefits from our investments as we reach our target completion by the end of the second quarter of our new fiscal year,” Joffe added.

Nine-Month Results

Net sales for the fiscal 2020 nine-month period increased 12 percent to a record $385.1 million from $343.7 million a year earlier.

Adjusted net sales for the fiscal 2020 nine-month period increased 12.8 percent to a record $387.7 million from $343.6 million last year.

Net income for the fiscal 2020 nine-month period was $903,000, or 5 cents per diluted share, compared with net loss of $5.1 million, or 27 cents per share, in fiscal 2019.

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Adjusted net income for the fiscal 2020 nine-month period was $20.1 million, or $1.05 per diluted share, compared with $21.2 million, or $1.10 per diluted share, in fiscal 2019.

Gross profit for the fiscal 2020 nine-month period was $81.8 million compared with $63.2 million a year earlier. Gross profit as a percentage of net sales for the fiscal 2020 nine-month period was 21.2 percent compared with 18.4 percent a year earlier. 

Adjusted gross profit for the fiscal 2020 nine-month period was $103.4 million compared with $89.8 million a year ago. Adjusted gross profit as a percentage of adjusted net sales for the nine months was 26.7 percent compared with 26.1 percent a year earlier. 

Updated Fiscal 2020 Sales Guidance

Due to the factors impacting the fiscal third quarter noted above, Motorcar Parts of America says it now believes net sales for its fiscal year 2020 ending March 31 should be approximately $534 million and adjusted net sales for its fiscal year 2020 ending March 31 should be approximately $539 million, representing 13 percent growth year-over-year on both a GAAP and non-GAAP basis, with sales momentum improving in the current fiscal fourth quarter.

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