MPA Q4 2024 Earnings Report
Key Takeaways
Motorcar Parts of America reported a decrease in net sales for the fourth quarter of fiscal year 2024, impacted by industry softness. However, the company saw continued progress in growing sales, increasing gross margins and gross profit, and generating positive cash flow. The company is focused on executing strategic plans, supported by positive cash flow and neutralizing working capital.
Net sales for the fourth quarter were $189.5 million, compared to $194.7 million in the prior year.
Operating income for the fourth quarter was $12.2 million, compared to $23.7 million in the prior year.
Net income for the fourth quarter was $1.3 million, compared to $1.5 million for the prior year.
Sales in April and May 2024 indicate a strong start to the new fiscal year.
MPA
MPA
Forward Guidance
Motorcar Parts of America expects net sales for its fiscal year ending March 31, 2025 to be between $746 million to $766 million, representing between 3.9 percent and 6.7 percent year-over-year growth. Operating income is expected to be between $62 million and $67 million, before the non-cash foreign exchange impact of lease liabilities and forward contracts and the non-cash impact of revaluation of cores on customers’ shelves.
Positive Outlook
- Sales volume improving
- Ordering activity has gained momentum
- Industry fundamentals are improving and will drive product demand
- Margin improvement
- Improving overhead absorption as brake-related business gains further momentum
Challenges Ahead
- Industry softness in the fourth quarter.
- Impacted by $5.6 million of less favorable foreign exchange rate related gains associated with lease liabilities and forward contracts compared with the prior year
- Impacted by a $5.1 million employee retention credit benefit in the prior year.
- 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
- Net income for the fiscal 2024 fourth quarter was impacted by approximately $800,000, or $0.04 per diluted share, of non-cash items, and $1.2 million, or $0.05 per diluted share, of cash items