Motorcar Parts of America Inc. (MPA) has reported results for its fiscal 2021 second quarter ended Sept. 30, 2020, reflecting continued favorable sales momentum with increased profitability and positive cash flow from operations.
Net sales for the fiscal 2021 second quarter were $154.7 million compared with $150.4 million for the same period a year earlier. Net sales for the quarter include $12.8 million in core revenue due to a realignment of inventory at two customer distribution centers with expected future sales benefits as product mix changes.
Net income for the fiscal 2021 second quarter was $15.2 million, or $0.78 per diluted share, compared with net income of $6.2 million, or $0.32 per diluted share, a year ago.
“Notwithstanding the continued impact of global pandemic challenges, we reported solid results for the quarter and six-month period. The company’s strategic growth initiatives are proceeding as planned – including the launch of our brake caliper production facility, as detailed in a recent announcement – and we are well-positioned in the industry,” said Selwyn Joffe, chairman, president and CEO of Motorcar Parts of America.
“In today’s COVID environment, the automobile, more than ever, is the preferable mode of transportation for activities such as work, shopping, appointments, and family vacations. As a consequence, maintenance and repair activities are even more essential. The products we provide are critical to the automobile and the demand for our offerings continue to expand,” Joffe added.
Results for the fiscal second quarter were impacted by approximately $2 million on a pre-tax basis, or $0.08 per share on a tax-effected basis, for cost of goods sold and operating expenses related to safety and health initiatives associated with COVID-19. Approximately $1.3 million of the $2 million relates to incremental bonuses and wages paid to the company’s dedicated operating employees on the front line. The balance relates to personal protection equipment (PPE) and social distancing initiatives.
Cash generated from operating activities was $16.9 million for the fiscal 2021 second quarter and bank debt less cash for the same period was reduced by $12.3 million to $95.4 million at Sept. 30, 2020.
Gross profit for the fiscal 2021 second quarter was $39.7 million compared with $36.6 million a year earlier. Gross profit as a percentage of net sales for the fiscal 2021 second quarter was 25.7 percent compared with 24.3 percent a year earlier.
Net sales for the fiscal 2021 six-month period were $250.1 million compared with $259.5 million a year earlier. Net sales for the six months ended Sept. 30, 2020, benefited by $12.8 million due to a realignment of inventory at two customer distribution centers with expected future sales benefits as product mix changes, as noted in the quarterly sales discussion.
Net income for the fiscal 2021 six-month period was $12.2 million, or $0.63 per diluted share, compared with net income of $38,000, or $0.00 per diluted share, a year ago.
Cash generated from operating activities was $39.3 million during the six months ended September 30, 2020, and bank debt less cash was reduced by $31.1 million.
Gross profit for the fiscal 2021 six-month period was $53.1 million compared with $54.2 million a year earlier. Gross profit as a percentage of net sales for the fiscal 2021 six-month period was 21.2 percent compared with 20.9 percent a year earlier.
FISCAL 2021 OUTLOOK
“Despite strong performance for the quarter, and continued favorable sales momentum, the company believes it is still not prudent to provide annual sales and gross margin guidance for fiscal 2021,” said Joffe. “As I stated in our 2020 fiscal year-end release, our industry is resilient, and we are continuing to execute our strategic plans for growth and profitability. We are guardedly optimistic about the near- and long-term opportunities as an essential supplier in the $125 billion hard parts industry and look forward to a recovery from this global crisis. In fact, we are resuming our stock buy-back program subject to market conditions, with current availability of $21.3 million under our existing authorization.”