Motorcar Parts of America, Inc. released its financial results for the fiscal 2024 third quarter and nine-month period ending December 31, 2023, showcasing increases in net sales, operating income and cash flow from operating activities.
During the fiscal third quarter, net sales surged by 13.2 percent to $171.9 million, accompanied by a substantial improvement in gross margin by 3.7 percentage points. Gross profit increased by 43.1 percent to $30 million, while operating income increased 170.1 percent to $9.5 million. The company generated approximately $53.6 million in cash from operating activities during the quarter, according to MPA’s earnings report.
MPA said interest expenses for the fiscal third quarter rose by $6.8 million, primarily due to higher market interest rates and increased utilization of accounts receivable discount programs.
However, owing to certain non-cash items, including a U.S. federal and state deferred tax asset valuation allowance under U.S. GAAP, the company reported a net loss of $47.2 million, or $2.40 per share, compared to a net income of $1 million, or $0.05 per diluted share, in the previous year.
For the fiscal nine-month period, net sales reached a record $528.2 million, marking an 8.2 percent increase from the previous year. Gross profit surged by 25.6 percent to $97.8 million, with gross margin standing at 18.5 percent. Operating income for the nine-month period increased by 166.7 percent to $33.9 million.
Interest expense for the nine months rose by $17.7 million due to higher market interest rates and increased utilization of accounts receivable discount programs.
Despite reporting a net loss of $50.6 million for the nine-month period, the company remains optimistic about its sales volume, expecting to benefit from current extreme weather conditions and continued product demand in the industry. Margin improvement and operational efficiencies through volume increases are also anticipated to enhance cash flow from working capital initiatives, the company said.
