On June 11, 2024, Motorcar Parts of America Inc (MPAA, Financial) released its 8-K filing for the fiscal year ending March 31, 2024. Motorcar Parts of America Inc is a U.S.-based manufacturer, remanufacturer, and distributor of aftermarket automotive and light truck applications. The company produces starter engines, alternators, hub assemblies, bearings, and master cylinders, primarily selling rotating electrical products, wheel hub products, and brake master cylinders in the U.S.
Quarterly Performance
For the fiscal 2024 fourth quarter, Motorcar Parts of America Inc reported net sales of $189.5 million, a slight decrease from $194.7 million in the prior year, attributed to industry softness. Gross profit for the quarter was $34.8 million, down from $36.2 million a year earlier, with a gross margin of 18.4% compared to 18.6% in the previous year.
Operating income for the quarter was $12.2 million, significantly lower than the $23.7 million reported in the prior year. This decline was impacted by less favorable foreign exchange rate-related gains and the absence of a $5.1 million employee retention credit benefit from the previous year. Net income for the quarter was $1.3 million, compared to $1.5 million in the prior year.
Annual Performance
For the full fiscal year 2024, Motorcar Parts of America Inc achieved record net sales of $717.7 million, a 5.1% increase from $683.1 million in the previous year. Gross profit for the year rose by 16.3% to $132.6 million, with a gross margin of 18.5%, up from 16.7% a year earlier. Operating income increased by 26.5% to $46.1 million from $36.4 million in the prior year.
However, the company reported a net loss of $49.2 million, or $2.51 per share, compared to a net loss of $4.2 million, or $0.22 per share, in the previous year. This loss was primarily due to $50.3 million of non-cash items, including a $38.0 million U.S. federal and state deferred tax asset valuation allowance.
Financial Metrics and Achievements
Despite the challenges, Motorcar Parts of America Inc generated approximately $39.2 million of cash from operating activities during fiscal 2024 and reduced net bank debt by $32.5 million to $114.0 million. The company also reported a strong start to the new fiscal year, with promising sales in April and May 2024.
Key Financial Data
| Metric | Q4 2024 | Q4 2023 | FY 2024 | FY 2023 |
|---|---|---|---|---|
| Net Sales | $189.5 million | $194.7 million | $717.7 million | $683.1 million |
| Gross Profit | $34.8 million | $36.2 million | $132.6 million | $114.0 million |
| Operating Income | $12.2 million | $23.7 million | $46.1 million | $36.4 million |
| Net Income (Loss) | $1.3 million | $1.5 million | $(49.2) million | $(4.2) million |
Analysis and Outlook
Motorcar Parts of America Inc's fiscal 2024 results reflect a mixed performance, with record sales and increased gross profit but a significant net loss due to non-cash items. The company's ability to generate positive cash flow and reduce debt is a positive indicator for future stability. The outlook for fiscal 2025 is optimistic, with expected net sales growth between 3.9% and 6.7% and operating income projected to increase significantly.
"Our fiscal 2024 results indicate continued progress in growing sales, increasing gross margins and gross profit, and generating positive cash flow, which we expect to continue in the new fiscal year," said Selwyn Joffe, chairman, president, and chief executive officer.
For more detailed financial information, please refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from Motorcar Parts of America Inc for further details.
