Financial Performance - Consolidated net sales for the three months ended September 30, 2024, were $208,186,000, an increase of $11,547,000, or 5.9%, from $196,639,000 for the same period in 2023[95] - Gross profit for the three months ended September 30, 2024, was $41,277,000, representing a gross margin of 19.8%, down from 20.9% in the same period of 2023[96] - Operating income for the three months ended September 30, 2024, was $12,520,000, compared to $13,937,000 for the same period in 2023, reflecting a decrease due to foreign exchange impacts[102] - Consolidated net sales for the six months ended September 30, 2024, were $378,073,000, an increase of $21,729,000, or 6.1%, from $356,344,000 for the same period in 2023[109] - Gross profit for the six months ended September 30, 2024, was $70,451,000, with a gross margin of 18.6%, slightly down from 19.0% in the same period of 2023[111] - Operating income decreased to $6,064,000 for the six months ended September 30, 2024, down from $24,378,000 in the same period of 2023[117] Cash Flow and Expenses - Cash flow provided by operations for the six months ended September 30, 2024, was $2,011,000, a significant improvement from a cash outflow of $5,170,000 for the same period in 2023[108] - General and administrative expenses for the three months ended September 30, 2024, were $15,052,000, an increase of $727,000, or 5.1%, from $14,325,000 in the same period of 2023[99] - General and administrative expenses increased by $4,795,000, or 17.8%, to $31,722,000 for the six months ended September 30, 2024, compared to $26,927,000 for the same period in 2023[113] - Interest expense for the three months ended September 30, 2024, was $14,182,000, a decrease of $1,201,000, or 7.8%, from $15,383,000 in the same period of 2023[103] - Interest expense increased by $1,466,000, or 5.4%, to $28,569,000 for the six months ended September 30, 2024, compared to $27,103,000 for the same period in 2023[118] Operational Changes - The company has ceased manufacturing at its Torrance, California facility and is realigning production to enhance operating efficiencies[91] - The company expects to realize future benefits from cost-saving initiatives and new business onboarding expenses totaling $2,686,000 for the three months ended September 30, 2024[111] Financial Position - The company had working capital of $154,260,000 and a current ratio of 1.4:1.0 as of September 30, 2024[122] - The company utilized $18,745,000 of its $37,000,000 share repurchase program as of September 30, 2024[125] - Receivables discounted under accounts receivable discount programs increased to $303,638,000 for the six months ended September 30, 2024, from $255,303,000 in the same period of 2023[139] - The effective interest rate on the company's revolving facility was 8.17% as of September 30, 2024[130] - The company had $26,487,000 of outstanding supplier obligations confirmed as valid under the supplier finance program, included in accounts payable and accrued liabilities[140] Market and Risk Assessment - Foreign exchange impact of lease liabilities and forward contracts resulted in non-cash losses of $16,506,000 for the six months ended September 30, 2024, compared to $490,000 in the same period of 2023[115] - The change in fair value of the compound net derivative liability resulted in a non-cash gain of $2,200,000 for the six months ended September 30, 2024, compared to a loss of $530,000 in the same period of 2023[119] - As of September 30, 2024, $15,000,000 of commitments from participating financial institutions is available to suppliers under the supplier finance program[140] - There have been no material changes in market risk from the information provided in the Annual Report on Form 10-K as of March 31, 2024[151] Capital Expenditures - Total capital expenditures for the six months ended September 30, 2024, were $1,219,000, compared to $315,000 for the same period in 2023, reflecting a significant increase[141] - Capital expenditures for fiscal 2025 are expected to be approximately $5,000,000 to support global growth initiatives and current operations[141] Governance and Compliance - The Board appointed Douglas Trussler to the Board in connection with the issuance of Convertible Notes on March 31, 2023[143] - The company is evaluating the impact of new accounting standards issued by the FASB, including ASU 2023-06 and ASU 2023-07, which will affect financial statement disclosures[147][148]

Financial Performance - Net sales for the fiscal 2025 second quarter increased 5.9% to a record $208.2 million from $196.6 million in the prior year[4]. - Gross profit for the fiscal 2025 second quarter reached a record $41.3 million, with a gross margin of 19.8%, down from 20.9% a year earlier[5]. - Net loss for the fiscal 2025 second quarter was $3.0 million, or $0.15 per share, compared to a net loss of $2.0 million, or $0.10 per share, a year ago[7]. - For the six-month period, net sales increased 6.1% to a record $378.1 million from $356.3 million a year ago[11]. - GAAP net loss for the three months ended September 30, 2024, was $(2,954,000), compared to a net loss of $(1,958,000) in the same period of 2023[28]. - The company reported a GAAP net loss of $(21,039,000) for the six months ended September 30, 2024, compared to a net loss of $(3,368,000) in the same period of 2023[29]. Cash Flow and Debt Management - The company generated $22.9 million in cash from operating activities and reduced net bank debt by $22.0 million to $114.3 million[10]. - Interest expense for the fiscal second quarter decreased by $1.2 million to $14.2 million from $15.4 million a year ago[6]. - Interest expense for Q3 2024 was $14,182,000, slightly down from $15,383,000 in Q3 2023[32]. Guidance and Future Expectations - Fiscal 2025 guidance estimates net sales between $746 million and $766 million, representing 3.9% to 6.7% year-over-year growth[17]. - The company expects operating income for fiscal 2025 to be between $79 million and $84 million, before certain non-cash items and one-time expenses[17]. - The company anticipates continued improvements in gross margins, gross profit, and cash flow in the upcoming quarters[8]. Asset and Liability Management - Total current assets decreased to $548,202,000 as of September 30, 2024, from $560,459,000 as of March 31, 2024, representing a decline of approximately 2.3%[24]. - Total liabilities decreased slightly to $722,279,000 as of September 30, 2024, from $726,892,000 as of March 31, 2024[24]. - Total shareholders' equity decreased to $263,963,000 as of September 30, 2024, from $285,110,000 as of March 31, 2024, a decline of approximately 7.4%[24]. Inventory and Receivables - Accounts receivable increased to $112,699,000 as of September 30, 2024, up from $96,296,000, reflecting a growth of about 17%[24]. - Inventory decreased to $378,776,000 as of September 30, 2024, down from $397,328,000, indicating a reduction of approximately 4.7%[24]. Non-Cash and Cash Items Impact - Non-cash items impacting net income for the three months ended September 30, 2024, totaled $7,957,000, compared to $8,665,000 in 2023[28]. - EBITDA for the six months ended September 30, 2024, was significantly impacted by foreign exchange effects, totaling $16,506,000[29]. - New product line start-up costs for the six months ended September 30, 2024, amounted to $4,438,000, compared to $684,000 in the same period of 2023[29]. - Total non-cash items impacting gross profit for Q3 2024 amounted to $3,785,000, representing 1.8% of gross profit, down from $4,702,000 or 2.4% in Q3 2023[30]. - Cash items impacting gross profit in Q3 2024 included new product line start-up costs of $1,298,000, while supply chain disruptions in Q3 2023 incurred costs of $3,199,000[30]. - Total non-cash items impacting EBITDA for Q3 2024 were $10,609,000, down from $11,553,000 in Q3 2023[32]. - Cash items impacting EBITDA for Q3 2024 included new product line start-up costs of $1,498,000, while Q3 2023 had cash items of $3,548,000[32]. Gross Profit and Margins - Gross margin for the fiscal 2025 six-month period was 18.6%, compared to 19.0% a year earlier, impacted by non-cash and one-time cash expenses[12]. - GAAP gross profit for Q3 2024 was $41,277,000, with a gross margin of 19.8%, compared to $41,148,000 and a gross margin of 20.9% in Q3 2023[30]. - For the first six months of 2024, GAAP gross profit was $70,451,000, reflecting a gross margin of 18.6%, versus $67,715,000 and a gross margin of 19.0% in the same period of 2023[31]. - The company experienced a decrease in supply chain disruption costs from $5,183,000 in the first half of 2023 to no costs reported in the first half of 2024[31].

Group 1 - Motorcar Parts of America (NASDAQ: MPAA) has been actively expanding its product range and improving operations, yet it continues to face long-standing financial difficulties and poor stock performance [1] - The mission of Grassroots Trading emphasizes providing objective and unbiased research focused on small- to mid-cap companies, while also identifying opportunities in larger companies [1]

Financial Data and Key Metrics - Net sales increased 6.4% to a first quarter record of $169.9 million, up from $159.7 million in the prior year [14] - Gross profit increased 9.8% to $29.2 million, with gross margin rising to 17.2% from 16.6% a year earlier [14][16] - Operating expenses were $35.6 million, impacted by a $11.1 million non-cash foreign exchange loss and $2.9 million in severance expenses [16][17] - Net loss for the quarter was $18.1 million, compared to a net loss of $1.4 million a year ago [19] - EBITDA for the quarter was negative $1.1 million, primarily due to non-cash items and severance expenses [20] Business Line Performance - Product mix for the quarter: 65% rotating electrical, 7% wheel hubs, 24% brakes, and 4% others [24] - The brake program is expected to drive margin accretion as volume increases absorb overhead [6] - The Diagnostic business is projected to sell over $100 million of equipment in the next 3 years, with additional service revenue opportunities [8] - Heavy-Duty business continues to gain momentum across multiple platforms, including agriculture, Class 8 trucks, and construction [9] Market Performance - Sales in Mexico are growing, driven by increased demand for aftermarket parts and the expansion of U.S.-based retailers in the region [11] - The company opened a new facility in Malaysia to support wheel hub manufacturing, enhancing its competitive position [10] - The average age of vehicles in the U.S. is now 12.8 years, with 98.8% of the car park comprising hybrid and internal combustion vehicles, supporting long-term demand for non-discretionary aftermarket parts [12] Strategic Initiatives and Industry Competition - The company is focused on cost reduction initiatives, including a multiyear relocation process expected to generate $7 million in annualized savings [5] - Accelerating new part number introductions, targeting at least 800 per year, to maintain leadership in the categories supplied [8] - The company is leveraging its global footprint, including a new facility in Malaysia, to enhance operational efficiencies and meet growing demand [10] Management Commentary on Operating Environment and Future Outlook - Management remains optimistic about achieving full-year targets, with strong sales performance in July and expectations for further improvements in gross margin [4] - The company is focused on neutralizing working capital, improving inventory management, and extending vendor payment terms to enhance cash flow [21] - Management highlighted the positive impact of cost-saving initiatives and the potential for further efficiencies as new product lines gain traction [25] Other Important Information - The company announced the election of Jack Liebau and Anil Shrivastava to the Board, emphasizing their qualifications and commitment to driving shareholder value [13] - The company expects to generate positive cash flow for the full fiscal year, with operating income projected between $62 million and $67 million before non-cash items [22] Q&A Session Summary Question: Breakdown of revenue by product line and inventory dynamics - Revenue breakdown: 65% rotating electrical, 7% wheel hubs, 24% brakes, and 4% others [24] - Inventory levels are expected to moderate as the company enters a stronger second quarter, with significant progress in working capital anticipated [29][30] Question: Interest expense outlook and potential savings - Every 1% reduction in interest rates could save the company $7 million annually, with management encouraged by recent rate reductions [26] Question: Timing of new Brake business revenue - The largest tranche of Brake business is expected to start in January, with additional new business in Wheel Hubs and Rotating Electrical starting in the next few months [31] Question: Impact of higher returns on gross margin - Higher returns were due to a large customer's lower purchase levels, but this has already reversed in the current quarter, with return levels expected to normalize [32] Question: Spillover effect of Quality-Built brand success - The Quality-Built brand is gaining traction in the professional installer market, with positive feedback on brake pads and rotors expected to spill over to other product lines [34][38] Question: Opportunity in the Mexican market - The Mexican market is evolving, with increasing disposable income and the entry of major U.S. retailers, presenting a significant growth opportunity for the company [41][42] Question: Electric Vehicle Testing business outlook - The Electric Vehicle Testing business is experiencing slower growth, with the electric vehicle space not unfolding as quickly as anticipated, while hybrid technology is gaining momentum [36][37]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2024 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission File No. 001-33861 MOTORCAR PARTS OF AMERICA, INC. (Exact name of registrant as specified in its charter) New York 11-2153962 (State or other jurisdiction of i ...

Exhibit 99.1 NEWS RELEASE CONTACT: Gary S. Maier Vice President, Corporate Communications & IR (310) 972-5124 MOTORCAR PARTS OF AMERICA REPORTS FISCAL FIRST QUARTER RESULTS - Record Sales for a First Quarter; Full-Year Outlook Remains on Track LOS ANGELES, CA – August 8, 2024 – Motorcar Parts of America, Inc. (Nasdaq: MPAA) today reported results for its fiscal 2025 first quarter ended June 30, 2024, with a continued favorable full-year outlook supported by a strong competitive industry position and ongoing ...

Financial Performance - Sales increased by 5.1 percent to a record $717.7 million in fiscal 2024[149] - Gross profit rose 16.3 percent to $132.6 million, with gross margin increasing by 1.8 percentage points to 18.5 percent[149] - Operating income increased 26.5 percent to $46.1 million[149] - Consolidated net sales for fiscal 2024 were $717,684,000, an increase of $34,610,000, or 5.1%, from fiscal 2023's $683,074,000 due to strong demand for rotating electric and brake-related product lines[200] - Consolidated gross margin improved to 18.5% in fiscal 2024 from 16.7% in fiscal 2023, attributed to better facility utilization and price increases[201] - Operating income for fiscal 2024 was $46,120,000, an increase of $9,674,000, or 26.5%, from $36,446,000 in fiscal 2023[209] Cash Flow and Debt Management - Cash generated from operating activities was approximately $39.2 million[149] - Cash flows provided by operations for fiscal 2024 were $39,172,000, a significant improvement from $(21,754,000) in fiscal 2023[199] - Net bank debt was reduced by $32.5 million to $114.0 million[149] - The outstanding balance under the Revolving Facility was $128,000,000 as of March 31, 2024, compared to $145,200,000 in 2023[227] - The company issued $32,000,000 in convertible notes due in 2029, bearing an interest rate of 10.0% per annum, with the first interest payment due on April 1, 2024[229] - The effective interest rate on the convertible notes was 18.3% as of March 31, 2024, reflecting the amortization of debt issuance costs[238] Inventory and Returns - Reserves for excess and obsolete inventory increased to $17,372,000 at March 31, 2024, from $16,436,000 at March 31, 2023, primarily due to excess finished goods inventory[173] - Customer finished goods returns accrual was $38,312,000 at March 31, 2024, compared to $37,984,000 at March 31, 2023, reflecting changes in returned goods authorizations[193] - Finished goods turnover for fiscal 2024 was 3.7, slightly down from 3.6 in fiscal 2023, indicating a stable ability to convert inventory into revenue[199] Expenses and Cost Management - General and administrative expenses increased by $3,013,000, or 5.5%, to $57,769,000 in fiscal 2024 from $54,756,000 in fiscal 2023[204] - Research and development expenses decreased by $327,000, or 3.2%, to $9,995,000 in fiscal 2024 from $10,322,000 in fiscal 2023[207] - Interest expense rose to $60,040,000 in fiscal 2024, an increase of $20,485,000, or 51.8%, from $39,555,000 in fiscal 2023, primarily due to higher interest rates[210] Market and Operational Developments - A new facility was opened in Malaysia to support manufacturing of wheel hub products[149] - Market share for brake-related product lines increased, particularly in the professional installer market[149] - Sales growth in the Mexican market continued to accelerate, driven by market share gains[149] Financial Position and Risks - The company had working capital of $156,034,000 with a current ratio of 1.4:1.0 as of March 31, 2024[216] - The company recorded a discrete non-cash valuation allowance of $38,009,000 on deferred tax assets during fiscal 2024, leading to an effective tax rate of (276.8)%[213] - The company maintains an allowance for credit losses deemed adequate to cover potential losses from accounts receivable[255] - The company is exposed to foreign currency exchange risks primarily from the Mexican peso and Chinese yuan, and uses forward contracts to mitigate these risks[253] - The company’s financial position could be adversely affected if customers experience significant cash flow problems, impacting the outstanding receivable balance and the value of Remanufactured Cores[255] Future Outlook and Investments - Total capital expenditures for fiscal 2024 were $1,755,000, with an expected increase to approximately $7,000,000 for fiscal 2025 to support global growth initiatives[246] - The company has contractual obligations totaling $369,712,000, with significant payments due in the next 1 to 3 years amounting to $56,504,000[247] - The company has not repurchased any shares during fiscal 2024 and 2023, with $18,255,000 remaining available under the share repurchase program as of March 31, 2024[245]

Financial Data and Key Metrics Changes - Net sales increased by 5.1% to $717.7 million for fiscal year 2024, compared to $683.1 million in the previous year [4][5] - Gross profit rose by 16.3% to $132.6 million from $114 million a year earlier, with gross margin increasing by 1.8 percentage points to 18.5% [4][6] - Operating income for the full fiscal year increased by 26.5% to $46.1 million from $36.4 million in the prior year [8] - Interest expense for the full year was $60 million, up from $39.6 million, primarily due to higher market interest rates [9] Business Line Data and Key Metrics Changes - The fourth quarter net sales were $189.5 million, down from $194.7 million in the prior year, primarily impacted by softer wheel hub sales [5] - Gross profit for the fourth quarter was $34.8 million compared to $36.2 million a year earlier [6] - Operating income for the fourth quarter was $12.2 million, down from $23.7 million in the prior year [8] Market Data and Key Metrics Changes - The company is experiencing growth in all product categories except for wheel hubs, which are expected to regain momentum [25] - The hard part sales in Mexico are gaining momentum, with a focus on additional opportunities across multiple product lines [33] Company Strategy and Development Direction - The company is focused on generating cash from increased profitability and working capital, with expectations of benefiting from volume increases in the brake program [12] - Strategic initiatives include extending days outstanding on payables to reduce working capital by $20 million [13] - The company aims to introduce at least 800 new part numbers per year to maintain its leadership position [15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about a vibrant market and expects growth across all product lines, attributing some of the positive trends to weather and tax refunds [47] - The company anticipates achieving sales in the range of $746 million to $766 million for fiscal 2025, representing a year-over-year growth of 3.9% to 6.7% [96] - Management acknowledged the challenges posed by higher interest expenses but remains confident in the company's liquidity and cash generation capabilities [11][74] Other Important Information - The company has received input from major shareholders regarding board qualifications and is in the process of refreshing the board [2][37] - A new facility in Malaysia has been opened to support manufacturing of wheel hub products, enhancing competitive positioning [32] Q&A Session Summary Question: What trends are benefiting the April and May numbers? - Management noted a vibrant market with increases across all product lines, not just wheel hubs, and attributed some of this to weather and tax refunds [47] Question: When will the brake business margins meet company averages? - Management indicated that brake margins are currently below legacy product margins and expects significant improvement over the next two years [51][91] Question: Why has the wheel hub business been soft? - Management acknowledged a short-term setback in wheel hub sales but expects to regain momentum soon, with no current weakness in other product lines [58] Question: Will the board consider a buyback given the decline in shareholder equity? - Management confirmed that a buyback is authorized and would be considered, emphasizing strong liquidity and cash generation [74] Question: What can be communicated to prospective investors regarding recent earnings disappointment? - Management highlighted expectations for margin accretion and growth in products, along with incremental cash flow and flexibility in capital allocation [77]

Motorcar Parts (MPAA) came out with quarterly earnings of $0.06 per share, missing the Zacks Consensus Estimate of $0.16 per share. This compares to loss of $0.05 per share a year ago. These figures are adjusted for non-recurring items. Motorcar Parts, which belongs to the Zacks Automotive - Replacement Parts industry, posted revenues of $189.48 million for the quarter ended March 2024, missing the Zacks Consensus Estimate by 4.59%. This compares to year-ago revenues of $194.73 million. The company has topp ...

Exhibit 99.1 NEWS RELEASE CONTACT: Gary S. Maier Vice President, Corporate Communications & IR (310) 972-5124 MOTORCAR PARTS OF AMERICA REPORTS YEAR-END RESULTS Interest expense for the fiscal fourth quarter increased by $2.8 million, or $0.09 per diluted share, to $14.6 million from $11.9 million a year ago, primarily due to higher market interest rates and increased collection of receivables utilizing accounts receivable discount programs on higher sales, partially offset by lower average outstanding bala ...