What factors drove the changes in Motorcar Parts's revenue and profit?

What does Motorcar Parts do and what are its main business segments?

Did Motorcar Parts beat or miss consensus estimates last quarter?

What is Motorcar Parts's gross profit margin?

What guidance did Motorcar Parts's management provide for the next earnings period?

What is the market's earnings forecast for Motorcar Parts next quarter?

What is the revenue and EPS growth rate for Motorcar Parts year over year?

What is Motorcar Parts's latest dividend and current dividend yield?

- **Revenue growth**: Q2 net sales up 6.4% to $221.5M, driven by brake and heavy-duty products. 6-month sales up 8.4%.
- **Margin improvement**: Gross profit at $42.7M (+3.5%), offset by $3.6M noncash expenses. Adjusted gross margin slightly higher.
- **Cash flow strength**: 6-month operating cash flow of $31.9M; 12-month free cash flow of $73.9M. Debt reduced by $24.6M to $56.7M.
- **Strategic initiatives**: Share buybacks of 287,910 shares ($3.4M) and plans to continue if undervalued. Focus on Mexico market expansion.
- **Key risks**: Temporary customer delay offsetting one-time revenue gain; industry deferral trends limited by product necessity.

**【CEO Summary Section】**
- **Strong financial performance**: Q2 net sales of $221.5M (+6.4% YoY), gross profit of $42.7M (+3.5%), and operating cash flow of $21.9M. 6-month sales up 8.4% to $409.8M.
- **Key growth drivers**: Brake-related products (e.g., Mexico-manufactured calipers) and heavy-duty aftermarket business. Mexico market sales growing nicely.
- **One-time revenue impacts**: $14.8M core revenue gain offset by $14.8M delay from a large customer, expected to reverse in H2.
- **Long-term tailwinds**: Aging U.S. vehicle fleet (12.8 years avg age) and high new car prices driving replacement demand.
- **Financial strength**: Reduced net bank debt by $24.6M to $56.7M in 6 months; share buybacks of 287,910 shares ($3.4M).

**【CFO Financial Commentary】**
- **Gross margin dynamics**: 19.3% (vs 19.8% YoY), impacted by $3.6M noncash expenses and $0.7M onetime costs. Adjusted gross margin slightly improved.
- **Operating efficiency**: Operating expenses down 8.3% to $26.4M, driven by $1.5M FX gain vs $5.4M loss YoY.
- **Cash flow strength**: 6-month operating cash flow of $31.9M vs $2M YoY. 12-month free cash flow of $73.9M.
- **Debt reduction**: Net bank debt down $98M over 2 years to $56.7M; liquidity of $161M.
- **Share buybacks**: 90,114 shares repurchased in Q2 at $15.41 avg price.

**【Q&A Key Highlights】**
- **Consumer deferral impact**: Temporary delay from a customer's warehouse restructuring, expected to reverse in H2. CEO emphasizes nondiscretionary nature of products limits long-term deferral.
- **Market share trends**: Brake products gaining momentum; no material changes in core market share. Heavy-duty business growing.
- **First Brands situation**: No direct impact; company focuses on reliability and integrity to capitalize on industry opportunities.
- **Cash utilization**: Plan to continue share buybacks if undervalued; maintain strong liquidity for growth opportunities. Debt levels considered low and comfortable.

Motorcar Parts of America, Inc. (MPAA) Q2 2026 Earnings Call Transcript

- **Q1 Record Results**: $188.4M net sales (+10.9% YoY), $33.9M gross profit (+16.3% YoY), and $20.1M operating income (vs. -$6.5M YoY).
- **Core Growth Drivers**: Hard parts, brake calipers, and Mexico market expansion offset 1.4% tariff impact.
- **Financial Strength**: $10M cash flow, $7M debt reduction, and $147M liquidity support share buybacks.
- **Guidance Uptick**: FY26 sales raised to $800-$820M, reflecting tariff pass-throughs and 80%+ organic growth.
- **Strategic Focus**: Professional installer market expansion, global brake product growth, and Mexico supply chain optimization.

**【CEO Summary Section】**
- **Record Q1 Performance**: Net sales reached $188.4 million (10.9% YoY growth), gross profit hit $33.9 million (16.3% YoY), and operating income rose to $20.1 million from a prior-year loss of $6.5 million.
- **Core Business Strength**: Hard parts (rotating electrical products) and brake-related offerings (e.g., Mexico-manufactured brake calipers) drove growth, with nondiscretionary demand supported by the U.S. vehicle fleet's 12.8-year average age.
- **Geographic Expansion**: Mexican market sales grew, aligning with U.S. retailers' expansion into Latin America. The diagnostic business (JBT-1 testers) also expanded, with service revenue from repairs and updates.
- **Financial Discipline**: Reduced net bank debt by $7 million to $74.4 million, repurchased 197,796 shares, and generated $10 million in cash from operations.
- **Tariff Mitigation**: Passed tariffs to customers and implemented cost reductions, with noncash foreign exchange gains contributing to improved margins.

**【CFO Financial Commentary】**
- **Gross Margin Dynamics**: 18% gross margin (vs. 17.2% YoY), driven by higher sales volume and cost absorption, despite $3.9 million noncash expenses (core premium amortization) and $1.4 million cash expenses.
- **Operating Efficiency**: Operating expenses fell to $13.8 million (from $35.6 million YoY), benefiting from $8.3 million noncash foreign exchange gains. Excluding noncash items, operating income rose 153.6% to $11.7 million.
- **Liquidity and Leverage**: Total cash and credit availability of $147 million, with net debt reduced by $94 million over two years. Interest expense decreased $1.6 million due to lower rates and debt levels.
- **Guidance Update**: Raised FY26 sales guidance to $800-$820 million (5.6%-8.3% YoY growth), reflecting tariff pass-throughs and organic demand. Operating income guidance remains $86-$91 million.

**【Q&A Key Highlights】**
- **Tariff Impact**: Q1 tariff costs dropped to $1.4 million (from $4.6 million in prior quarter), with further sequential declines expected. CFO emphasized that 80%+ of sales growth is organic, not tariff-driven.
- **Growth Drivers**: CEO highlighted opportunities in the professional installer market (Quality-Built brand expansion), global brake product growth, and diagnostic business internationalization.
- **Mexico Strategy**: Increasing local peso funding from Mexican sales to reduce reliance on forward contracts, aiming to eliminate foreign exchange volatility over time.
- **Competitive Position**: USMCA compliance and North American supply chain diversification provide strategic advantages against Chinese competitors.


Motorcar Parts of America, Inc. (MPAA) Q1 2026 Earnings Call Transcript

- **Record Growth**: Fiscal 2025 net sales and gross profit hit all-time highs, driven by nondiscretionary products and tariff mitigation.
- **Tariff Resilience**: 100% price increases neutralize tariff costs; <25% of products sourced from China, with USMCA compliance shielding Mexican production.
- **Profit Expansion**: Fiscal 2026 targets 3-5.6% sales growth and 4.3-10.4% operating income growth, supported by margin initiatives and market share gains.
- **Cash Strength**: $144.6 million liquidity and $32.6 million debt reduction highlight financial flexibility.

**【CEO Summary Section】**
- **Record Financial Performance**: Fiscal 2025 net sales reached $757 million (5.5% YoY growth), with gross profit at $154 million (16.1% YoY increase). Cash flow from operations was $45.5 million, reducing net debt by $32.6 million.
- **Tariff Mitigation Success**: 100% of customer price increases for tariff-affected products have been implemented. Less than 25% of products are sourced from China, with USMCA-compliant Mexican and Canadian production mitigating tariffs.
- **Business Growth Drivers**: Hard parts (rotating electrical) and brake-related products led sales, supported by a 12.8-year average vehicle age and 16 million vehicle registrations in 2024. Diagnostic business expanded with JBT-1 testers.
- **Future Outlook**: Fiscal 2026 guidance targets $780-$800 million in sales (3-5.6% YoY growth) and $86-$91 million in operating income. Focus on market share gains in Mexico and heavy-duty segments.

**【CFO Financial Commentary】**
- **Q4 2025 Results**: Net sales $191.1 million (1.9% YoY), gross profit $38.5 million (10.6% YoY). Gross margin 19.9% vs. 18.4% YoY, driven by price increases and cost control. Operating expenses $22.2 million (stable YoY).
- **Noncash Expenses**: $3.2 million in Q4 for core amortization and FX revaluation. Fiscal 2025 noncash expenses totaled $25 million, impacting net loss of $19.5 million.
- **Liquidity Strength**: $144.6 million in cash and available credit. Interest expense reduced by $2.1 million YoY due to lower rates and debt levels.

**【Q&A Key Highlights】**
- **Strategic Advantage**: Direct factory shipping avoids inventory tariffs, unlike competitors. Mexico sales growth reduces reliance on forward contracts.
- **Tariff Impact on Margin**: Tariffs slightly lower gross margin, but initiatives like overhead absorption and SKU expansion offset this.
- **Market Share Conversations**: Proactive with customers on price adjustments, emphasizing reliability and quality in uncertain trade environments.

Motorcar Parts of America (MPAA)-9 Jun 25-2025 Q4 Earnings call transcript

- **Record Performance**: Q3 2025 sales ($186.2M) and cash flow ($34.4M) set new highs, with debt reduced by 26% to $84M.
- **Profitability Surge**: Gross margin expanded 600 bps to 24.1%, driven by brake product growth (+49% gross profit) and operational efficiency.
- **Strategic Wins**: $2.1M in share buybacks, $100M diagnostic equipment target on track, and Mexico market share gains.
- **Risk Mitigation**: Tariff surcharges implemented, China production reduced to 12%, FX losses neutralized via local peso utilization.
- **Long-Term Growth**: 98.8% ICE vehicle fleet, 12.8-year vehicle age, and 50+ year rotating electrical category tailwinds.


**【CEO Opening Remarks】**
- Fiscal Q3 2025: Record sales of $186.2M (+8.3% YoY), gross margin improved to 24.1%, and cash flow from operations reached $34.4M.
- Debt reduced by $30.3M to $84M, with $2.1M in share buybacks.
- Key growth drivers: Rotating electrical business (+solid performance), brake-related products (+49% gross profit growth), and Mexico market expansion.
- Strategic initiatives: Diagnostic equipment (targeting $100M in revenue), heavy-duty partnerships (agriculture, construction, transit), and nondiscretionary aftermarket parts growth.
- Long-term tailwinds: Aging vehicle fleet (12.8-year average age), 98.8% ICE vehicles, and broad SKU coverage.

**【CFO Financial Details】**
- Net income: $2.3M (+$5M noncash expenses adjustment), EBITDA: $20.4M (excluding $5M noncash FX losses).
- Gross profit breakdown: $44.9M (+49.4% YoY), with $3.4M noncash core amortization and $1.9M FX lease remeasurement impact.
- Operating expenses: $27.3M (+33% YoY due to sales growth and new business onboarding).
- Interest expense: $14.4M (-21% YoY), tax expense: $1.1M (benefit from lower rate environment).
- Cash generation: $34.4M from operations, $118.8M in total liquidity.

**【Q&A Highlights】**
- **Tariff Strategy**: Implemented customer surcharges to offset 35% China tariffs, reduced China dependency to 12% of production.
- **Gross Margin Expansion**: 600 bps improvement driven by production efficiency, scale benefits, and new business ramp-up.
- **Cash Allocation**: Prioritize share buybacks ($2.1M Q3) and debt reduction, with $30.3M net debt paydown.
- **Mexico Operations**: No plans to shift production, current facilities sufficient to meet demand growth.
- **Brake Caliper Business**: Capacity utilization exceeds initial expectations, 2025 spring season demand outlook strong.


Motorcar Parts of America (MPAA)-10 Feb 25-2025 Q3 Earnings call transcript

Motorcar Parts of America (MPAA)-12 Nov 24-2025 Q2 Earnings call transcript

Motorcar Parts of America (MPAA)-8 Aug 24-2025 Q1 Earnings call transcript

Motorcar Parts of America (MPAA)-11 Jun 24-2024 Q4 Earnings call transcript

Motorcar Parts of America (MPAA)-9 Feb 24-2024 Q3 Earnings call transcript

Motorcar Parts of America (MPAA)-9 Nov 23-2024 Q2 Earnings call transcript

Motorcar Parts of America (MPAA)-9 Aug 23-2024 Q1 Earnings call transcript

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Motorcar Parts of America (MPAA)-9 Nov 22-2023 Q2 Earnings call transcript

Motorcar Parts of America (MPAA)-13 Aug 22-2023 Q1 Earnings call transcript

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Motorcar Parts of America (MPAA)-28 Jun 19-2019 Q4 Earnings call transcript

Motorcar Parts of America (MPAA)-11 Feb 19-2019 Q3 Earnings call transcript

Motorcar Parts of America (MPAA)-8 Jan 19-2019 Q2 Earnings call transcript

Motorcar Parts of America (MPAA)-12 Aug 18-2019 Q1 Earnings call transcript

Motorcar Parts of America (MPAA)-14 Jun 18-2018 Q4 Earnings call transcript

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