Motorcar Parts of America Inc. (MPA) has reported results for its fiscal 2022 first quarter ended June 30, 2021 – reflecting record sales for a fiscal first quarter.
Net sales for the fiscal 2022 first quarter increased 56.3 percent to $149 million from $95.4 million a year ago, and 36.5 percent from the pre-COVID fiscal first quarter two years ago.
Net income for the fiscal 2022 first quarter was $861,000, or $0.04 per diluted share, compared with a net loss of $3 million, or $0.16 per share, a year ago.
“Net sales and profitability for the fiscal first quarter benefitted, despite global supply chain-related disruptions, from continued strong demand for non-discretionary aftermarket parts – enhanced by the success of our multi-year strategic footprint expansion, including brake-related product line growth,” said Selwyn Joffe, chairman, president and CEO of Motorcar Parts of America.
Joffe noted that the first quarter benefitted from the opening up of the economy and stimulus payments. He added that customers purchased products earlier than normal to accommodate the anticipated stronger demand. “The success of the brake caliper program, which is seasonally stronger in the fiscal first quarter, contributed to solid growth early in our fiscal year,” Joffe emphasized.
“In addition, our presence in the electric vehicle market continued to gain momentum driven by increasing demand for battery power emulation, testing and development of inverters, electric motors, and high-speed battery-charging station applications offered by our wholly owned D&V subsidiary,” Joffe added.
Gross profit and operating expenses for the fiscal first quarter were impacted by COVID-19 expenses related to safety, health initiatives, inefficiencies in the supply chain and incrementally higher freight costs of approximately $5.3 million on a pre-tax basis, or $0.20 per share on a tax-effected basis.
Net cash used in operating activities was $4.7 million for the fiscal 2022 first quarter and net debt was $97.6 million at June 30, 2021, compared with $88.9 million at March 31, 2021, reflecting working capital requirements to support the record first quarter sales and inventory increases for anticipated business growth in fiscal 2022.
Gross profit for the fiscal 2022 first quarter was $23.6 million compared with $13.4 million a year earlier. Gross profit as a percentage of net sales for the fiscal 2022 first quarter was 15.8 percent compared with 14 percent a year earlier. Gross margin was primarily impacted by higher costs related to COVID-19; brake caliper start-up costs and other product relocation expenses related to the expansion in Mexico, both of which are now nearing completion. In addition to the above items, gross profit was further impacted by growth initiatives in connection with the expansion of our new product lines, and inflationary costs related to the global pandemic, especially disruptions with worldwide supply chain and logistics services.
“We are encouraged by the strong demand for automotive replacement parts, despite the global challenges related to the pandemic. Our product line expansion strategy continues to gain momentum and we remain focused on sales growth and opportunities to achieve further operating efficiencies, and enhanced profitability,” Joffe said.