Motorcar Parts of America Reports Fiscal 2026 Year-End Results

About this update from Motorcar Parts Of America, Inc.

Motorcar Parts of America, Inc. ( Nasdaq: MPAA ) today reported financial results for its fiscal 2026 fourth quarter and year ended March 31 – reflecting solid sales, gross profit and net income for both periods. Fourth Quarter Highlights: Net sales increased 9.9 percent to $212.3 million. Gross profit increased 30.9 percent to $50.4 million. Gross margin increased to 23.7 percent from 19.9 percent. Operating income increased 29.4 percent to $21.1 million. Net income was $9.7 million compared with net loss of $722,000 in the prior year. Repurchased 286,136 shares for $3.0 million at an average share price of $10.48. Positive Future Drivers: Awarded significant new business commitments and opportunities within a changing competitive landscape. Increasing utilization of brake-related capacity is expected to continue to support its margin accretion. Overall operating efficiencies are expected to result in continuing operating income improvement. Three-Month Results Net sales for the fiscal 2026 fourth quarter increased $19.2 million, or 9.9 percent, to $212.3 million from $193.1 million in the prior year. Net sales for the quarter include $19.9 million of core revenue in connection with the realignment of inventory at certain customer distribution centers. Gross profit for the fiscal 2026 fourth quarter increased $11.9 million, or 30.9 percent, to $50.4 million from $38.5 million a year earlier. Gross margin for the same period was 23.7 percent compared with 19.9 percent a year earlier. Gross margin was impacted by non-cash expenses of 1.8 percent and one-time items of 0.3 percent as detailed in Exhibit 3. Excluding these non-cash and certain one-time cash items, gross margin increased to 25.8 percent. Operating income for the fiscal fourth quarter was $21.1 million compared with $16.3 million in the prior year. Operating income was impacted by non-cash expenses of $6.7 million, partially offset by one-time net benefits of $3.3 million as detailed in Exhibit 6. Interest expense for the fiscal 2026 fourth quarter decreased by $2.3 million to $10.3 million from $12.5 million a year ago, reflecting lower utilization of accounts receivable discount programs and lower interest rates. Net income for the fiscal 2026 fourth quarter was $9.7 million, or $0.42 per diluted share, compared with a net loss of $722,000, or $0.04 per share, for the prior year. Net income was impacted by non-cash expenses of $4.1 million, or $0.18 per diluted share, and benefited from one-time items of $2.5 million, or $0.11 per diluted share, as detailed in Exhibit 1. “Notwithstanding some head winds in fiscal 2026, including a large customer’s ordering activity, we ended the year with a strong quarter and with significant new business commitments and opportunities which will phase in throughout fiscal 2027,” said Selwyn Joffe, chairman, president and chief executive officer. Joffe highlighted the company’s commitment to enhancing shareholder value. He reemphasized the company’s significant new business commitments and opportunities in North America, its focus on profitability and neutralizing working capital, and the benefits of a strong financial position. After share repurchases of $11.4 million for fiscal 2026, the company’s revolver loan of $94.7 million less cash of $14.7 million at March 31, 2026, resulted in net bank debt of $80.0 million. The company has $22.1 million remaining to repurchase shares under its current authorized share repurchase program. For the three years ended March 31, 2026, the company generated cash from operating activities of approximately $103.8 million. Twelve-Month Results Net sales for fiscal 2026 increased $32.5 million, or 4.3 percent, to $789.8 million from $757.4 million in the prior year. Net sales for fiscal 2026 reflect $35 million of core revenue in connection with the realignment of inventory at certain customer distribution centers, and an approximately $30 million sales decrease to one of the company’s large customers. Gross profit for fiscal 2026 was $159.9 million compared with $153.8 million a year earlier and gross margin for the twelve months was 20.2 percent compared with 20.3 percent a year earlier, impacted by items in Exhibit 4. Operating income for fiscal 2026 was $65.8 million compared with $39.9 million in the prior year, reflecting the favorable foreign exchange impact of lease liabilities and forward contracts. Operating income was impacted by non-cash expenses of $11.6 million and the benefit of one-time items of $791,000 as detailed in Exhibit 6. Excluding these non-cash and certain one-time cash items, operating income was $76.6 million. Interest expense decreased by $8.9 million for the twelve months to $46.7 million from $55.6 million a year ago, reflecting lower average outstanding balances under the company’s credit facility, lower utilization of accounts receivable discount programs and lower interest rates. Net income for fiscal 2026 was $12.4 million, or $0.62 per diluted share, compared with a net loss of $19.5 million, or $0.99 per share, a year ago. Net income was impacted by non-cash expenses of $7.8 million, or $0.39 per diluted share, and benefited from one-time cash items of $593,000, or $0.03 per diluted share, as detailed in Exhibit 2. Share Repurchase For fiscal 2026, the company repurchased 955,608 shares for $11.4 million at an average share price of $11.88. During the fiscal 2026 fourth quarter, the company repurchased 286,136 shares for $3.0 million at an average share price of $10.48 under its current authorization program. The company anticipates further opportunities to build shareholder value through enhanced profitability and strong cash generation. Fiscal 2027 Guidance Motorcar Parts of America expects net sales for the fiscal year ending March 31, 2027 to increase between 7.5 percent to 10.2 percent year-over-year growth, reflecting the exclusion of certain non-recurring items including tariff pass-throughs due to the reduction of import tariffs, and non-recurring core revenue, representing net sales of between $780 million to $800 million. Current guidance includes new business commitments that are expected to ramp up in the second half of the fiscal year. The timing of the ramp-up is due to customers taking advantage of liquidated inventory purchased from a previous supplier. In addition, the company expects to add more than $100 million of additional annualized net sales by the end of fiscal 2027, which is not included in its guidance due to the uncertainty of the timing. In summary, the company expects annualized net sales to be more than $900 million by the end of fiscal 2027. Operating income is expected to be between $86 million and $91 million, representing between 12.3 percent and 18.8 percent year-over-year growth, and these estimates reflect the expected impact of tariffs enacted as of June 8, 2026, and do not include certain non-cash items and one-time expenses. The company estimates depreciation and amortization will be approximately $9 million. Based on the above, the company expects EBITDA to be between $95 million and $100 million. Use of Non-GAAP Measure This press release includes the following non-GAAP measure – EBITDA, which is not a measure of financial performance under GAAP and should not be considered as an alternative to net income as a measure of financial performance. The company believes this non-GAAP measure, when considered together with the corresponding GAAP measures, provides useful information to investors and management regarding financial and business trends relating to the company’s results of operations. However, this non-GAAP measure has significant limitations in that it does not reflect all the costs and other items associated with the operation of the company’s business as determined in accordance with GAAP. In addition, the company’s non-GAAP measures may be calculated differently and are therefore not comparable to similar measures by other companies. Therefore, investors should consider non-GAAP measures in addition to, and not as a substitute for, or superior to, measures of financial performance in accordance with GAAP. For a definition and reconciliation of EBITDA to net income, its corresponding GAAP measure, see the financial tables included in this press release. Also, refer to our Form 8-K to which this release is attached, and other filings we make with the SEC, for further information regarding this measure. Earnings Conference Call and Webcast Selwyn Joffe, chairman, president and chief executive officer, and David Lee, chief financial officer, will host an investor conference call today at 10:00 a.m. Pacific time to discuss the company’s financial results and operations. The call will be open to all interested investors either through a live audio webcast at www.motorcarparts.com or live by calling (888) 440-5584 (domestic) or (646) 960-0457 (international). For those who are not available to listen to the live broadcast, the call will be archived on Motorcar Parts of America’s website www.motorcarparts.com . A telephone playback of the conference call will also be available from approximately 1:00 p.m. Pacific time on June 8, 2026 through 8:59 p.m. Pacific time on June 15, 2026 by calling (800) 770-2030 (domestic) or (609) 800-9909 (toll) and using access code: 1545314. About Motorcar Parts of America, Inc. Motorcar Parts of America, Inc. is a remanufacturer, manufacturer, and distributor of automotive aftermarket parts – including alternators, starters, wheel bearings and hub assemblies, brake calipers, brake pads, brake rotors, brake master cylinders, brake power boosters, and diagnostic testing equipment utilized in imported and domestic passenger vehicles, light trucks, and heavy-duty applications. Its products are sold to automotive retail outlets and the professional repair market throughout the United States, Canada, and Mexico, with facilities located in California, New York, Mexico, Malaysia, China and India, and administrative offices located in California, Tennessee, Mexico, Singapore, Malaysia, and Canada. In addition, the company’s electrical vehicle subsidiary designs and manufactures testing solutions for performance, endurance, and production of multiple components in the electric power train – providing simulation, emulation, and production applications for the electrification of both automotive and aerospace industries, including electric vehicle charging systems. Additional information is available at www.motorcarparts.com . The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for certain forward-looking statements. The statements contained in this press release that are not historical facts are forward-looking statements based on the company’s current expectations and beliefs concerning future developments and their potential effects on the company. These forward-looking statements involve significant risks and uncertainties (some of which are beyond the control of the company) and are subject to change based upon various factors. Reference is also made to the Risk Factors set forth in the company’s Form 10-K Annual Report filed with the Securities and Exchange Commission (SEC) in June 2026 and in its Forms 10-Q filed with the SEC for additional risks and uncertainties facing the company. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as the result of new information, future events or otherwise. MOTORCAR PARTS OF AMERICA, INC. AND SUBSIDIARIES Consolidated Statements of Operations   Three Months Ended March 31, Year Ended March 31,       2026       2025       2026       2025     Net sales $ 212,275,000   $ 193,105,000   $ 789,806,000   $ 757,354,000   Cost of goods sold   161,896,000     154,610,000     629,905,000     603,526,000   Gross profit   50,379,000     38,495,000     159,901,000     153,828,000   Operating expenses: General and administrative   18,209,000     16,113,000     63,303,000     64,047,000   Sales and marketing   6,120,000     5,657,000     25,491,000     22,561,000   Research and development   3,502,000     3,521,000     14,196,000     11,405,000   Foreign exchange impact of lease liabilities and forward contracts   1,487,000     (3,074,000 )   (8,924,000 )   15,892,000   Total operating expenses   29,318,000     22,217,000     94,066,000     113,905,000   Operating income   21,061,000     16,278,000     65,835,000     39,923,000   Other expenses: Interest expense, net   10,284,000     12,546,000     46,696,000     55,550,000   Change in fair value of compound net derivative liability   (1,270,000 )   2,520,000     (1,130,000 )   60,000   Total other expenses   9,014,000     15,066,000     45,566,000     55,610,000   Income (loss) before income tax expense   12,047,000     1,212,000     20,269,000     (15,687,000 ) Income tax expense   2,323,000     1,934,000     7,875,000     3,783,000   Net income (loss) $ 9,724,000   $ (722,000 ) $ 12,394,000   $ (19,470,000 ) Basic net income (loss) per share $ 0.51   $ (0.04 ) $ 0.64   $ (0.99 ) Diluted net income (loss) per share $ 0.42   $ (0.04 ) $ 0.62   $ (0.99 )   Weighted average number of shares outstanding: Basic   19,080,145     19,519,836     19,304,105     19,685,322   Diluted   22,482,230     19,519,836     19,979,070     19,685,322     MOTORCAR PARTS OF AMERICA, INC. AND SUBSIDIARIES Consolidated Balance Sheets   March 31, 2026 March 31, 2025 ASSETS Current assets: Cash and cash equivalents $ 14,650,000 $ 9,429,000 Short-term investments   2,028,000     1,881,000   Accounts receivable — net   112,614,000     91,064,000   Inventory — net   380,603,000     341,209,000   Inventory unreturned   16,438,000     18,460,000   Contract assets   34,552,000     29,606,000   Income tax receivable   5,241,000     4,208,000   Prepaid expenses and other current assets   17,856,000     15,614,000   Total current assets   583,982,000     511,471,000   Plant and equipment — net   30,739,000     31,990,000   Operating lease assets   63,103,000     66,603,000   Deferred income taxes   4,039,000     4,569,000   Long-term contract assets   331,221,000     336,268,000   Goodwill   3,205,000     3,205,000   Intangible assets — net   235,000     552,000   Other assets   2,913,000     2,978,000   TOTAL ASSETS $ 1,019,437,000   $ 957,636,000   LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 167,229,000   $ 141,906,000   Accrued liabilities   33,270,000     30,211,000   Customer finished goods returns accrual   29,923,000     34,411,000   Contract liabilities   61,201,000     38,158,000   Revolving loan   94,668,000     90,787,000   Other current liabilities   4,348,000     5,570,000   Operating lease liabilities   8,957,000     9,982,000   Total current liabilities 399,596,000 351,025,000   Convertible notes, related party   38,993,000     35,207,000   Contract liabilities, less current portion   249,108,000     241,404,000   Deferred income taxes   425,000     362,000   Operating lease liabilities, less current portion   56,969,000     65,308,000   Other liabilities   8,336,000     6,631,000   Total liabilities   753,427,000     699,937,000   Commitments and contingencies Shareholders' equity: Preferred stock; par value $.01 per share, 5,000,000 shares authorized; none issued   -     -   Series A junior participating preferred stock; par value $.01 per share, 20,000 shares authorized; none issued   -     -   Common stock; par value $.01 per share, 50,000,000 shares authorized; 18,924,818 and 19,435,706 shares issued and outstanding at March 31, 2026 and 2025, respectively   189,000     194,000   Additional paid-in capital   226,709,000     234,413,000   Retained earnings   32,427,000     20,033,000   Accumulated other comprehensive income   6,685,000     3,059,000   Total shareholders' equity   266,010,000     257,699,000   TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 1,019,437,000   $ 957,636,000     Additional Information and Non-GAAP Financial Measures To supplement the consolidated financial statements presented in accordance with U.S. generally accepted accounting principles ("GAAP"), the company has included the following additional information and non-GAAP financial measures for the three and twelve months ended March 31, 2026 and 2025. Among other things, the company uses such additional information and non-GAAP adjusted financial measures in addition to and together with corresponding GAAP measures to help analyze the performance of its business. The company believes this information helps provide a more complete understanding of the company's results of operations and the factors and trends affecting the company's business. However, this information should be considered as a supplement to, and not as a substitute for, or superior to, information contained in the company’s financial statements prepared in accordance with GAAP. In addition, the company’s non-GAAP measures may be calculated differently and are therefore not comparable to similar measures by other companies. The company defines EBITDA as earnings before interest, taxes, depreciation, and amortization. A reconciliation of EBITDA to net income is provided below along with information regarding such items. Items Impacting Net Income for the Three Months Ended March 31, 2026 and 2025 Exhibit 1   Three Months Ended March 31, 2026 2025     $   Per Diluted Share   $   Per Diluted Share GAAP net income (loss) $ 9,724,000   $ 0.42   $ (722,000 ) $ (0.04 )   Non-cash items impacting net income Core and finished goods premium amortization $ 3,086,000   $ 0.14   $ 2,725,000   $ 0.14   Revaluation - cores on customers' shelves   785,000     0.03     489,000     0.03   Share-based compensation expenses   1,317,000     0.06     868,000     0.04   Foreign exchange impact of lease liabilities and forward contracts   1,487,000     0.07     (3,074,000 )   (0.16 ) Change in fair value of compound net derivative liability   (1,270,000 )   (0.06 )   2,520,000     0.13   Tax effect (a)   (1,351,000 )   (0.06 )   (882,000 )   (0.05 ) Total non-cash items impacting net income $ 4,054,000   $ 0.18   $ 2,646,000   $ 0.14     Cash items impacting net income Transition expenses and severance (b)   3,235,000     0.14     160,000     0.01   Net tariff costs paid for products sold before price increases were effective   -     -     4,607,000     0.24   Gain due to realignment of inventory at customer distribution centers   (6,547,000 )   (0.29 )   -     -   Tax effect (a)   828,000     0.04     (1,192,000 )   (0.06 ) Total cash items impacting net income $ (2,484,000 ) $ (0.11 ) $ 3,575,000   $ 0.18   (a) Tax effect is calculated by applying an income tax rate of 25.0% to items listed above; this rate may differ from the period's actual income tax rate. (b) For the three months ended March 31, 2026, consists of $2,571,000 impacting gross profit and $664,000 included in operating expenses. For the three months ended March 31, 2025, consists of $160,000 included in operating expenses.   Items Impacting Net Income for the Twelve Months Ended March 31, 2026 and 2025 Exhibit 2   Twelve Months Ended March 31, 2026 2025 $ Per Diluted Share $ Per Diluted Share GAAP net income (loss) $ 12,394,000   $ 0.62   $ (19,470,000 ) $ (0.99 )   Non-cash items impacting net income Core and finished goods premium amortization $ 11,901,000   $ 0.60   $ 10,738,000   $ 0.55   Revaluation - cores on customers' shelves   3,590,000     0.18     2,805,000     0.14   Share-based compensation expenses   5,635,000     0.28     3,877,000     0.20   Foreign exchange impact of lease liabilities and forward contracts   (8,924,000 )   (0.45 )   15,892,000     0.81   Gain due to realignment of inventory at customer distribution centers   (643,000 )   (0.03 )   -     -   Change in fair value of compound net derivative liability   (1,130,000 )   (0.06 )   60,000     0.00   Tax effect (a)   (2,607,000 )   (0.13 )   (8,343,000 )   (0.42 ) Total non-cash items impacting net income $ 7,822,000   $ 0.39   $ 25,029,000   $ 1.27     Cash items impacting net income Transition expenses and severance (b)   3,632,000     0.18     4,598,000     0.23   Net tariff costs paid for products sold before price increases were effective   2,124,000     0.11     4,607,000     0.23   Gain due to realignment of inventory at customer distribution centers   (6,547,000 )   (0.33 )   -     -   Tax effect (a)   198,000     0.01     (2,301,000 )   (0.12 ) Total cash items impacting net income $ (593,000 ) $ (0.03 ) $ 6,904,000   $ 0.35   (a) Tax effect is calculated by applying an income tax rate of 25.0% to items listed above; this rate may differ from the period's actual income tax rate. (b) For the twelve months ended March 31, 2026, consists of $2,571,000 impacting gross profit and $1,061,000 included in operating expenses. For the twelve months ended March 31, 2025, consists of $1,298,000 impacting gross profit and $3,300,000 included in operating expenses.   Items Impacting Gross Profit for the Three Months Ended March 31, 2026 and 2025 Exhibit 3   Three Months Ended March 31, 2026 2025       $   Gross Margin   $   Gross Margin GAAP gross profit $ 50,379,000   23.7 % $ 38,495,000 19.9 %   Non-cash items impacting gross profit Core and finished goods premium amortization $ 3,086,000   1.5 % $ 2,725,000   1.4 % Revaluation - cores on customers' shelves   785,000   0.4 %   489,000   0.3 % Total non-cash items impacting gross profit $ 3,871,000   1.8 % $ 3,214,000   1.7 %   Cash items impacting gross profit Transition expenses and severance   2,571,000   1.2 %   -   -   Net tariff costs paid for products sold before price increases were effective   -   -     4,607,000   2.4 % Gain due to realignment of inventory at customer distribution centers (a)   (6,547,000 ) -0.9 %   -   -   Total cash items impacting gross profit $ (3,976,000 ) 0.3 % $ 4,607,000   2.4 % (a) gross margin reflecting impact to net sales and cost of goods sold   Items Impacting Gross Profit for the Twelve Months Ended March 31, 2026 and 2025 Exhibit 4   Twelve Months Ended March 31, 2026 2025     $   Gross Margin   $   Gross Margin GAAP gross profit $ 159,901,000   20.2 % $ 153,828,000 20.3 %   Non-cash items impacting gross profit Core and finished goods premium amortization $ 11,901,000   1.5 % $ 10,738,000   1.4 % Revaluation - cores on customers' shelves   3,590,000   0.5 %   2,805,000   0.4 % Gain due to realignment of inventory at customer distribution centers (a)   (643,000 ) 0.3 %   -   -   Total non-cash items impacting gross profit $ 14,848,000   2.3 % $ 13,543,000   1.8 %   Cash items impacting gross profit Transition expenses and severance   2,571,000   0.3 %   1,298,000   0.2 % Net tariff costs paid for products sold before price increases were effective   2,124,000   0.3 %   4,607,000   0.6 % Gain due to realignment of inventory at customer distribution centers (a)   (6,547,000 ) -0.3 %   -   -   Total cash items impacting gross profit $ (1,852,000 ) 0.3 % $ 5,905,000   0.8 % (a) gross margin reflecting impact to net sales and cost of goods sold   Items Impacting EBITDA for the Three and Twelve Months Ended March 31, 2026 and 2025 Exhibit 5   Three Months Ended March 31, Twelve Months Ended March 31,       2026       2025       2026       2025   GAAP net income (loss) $ 9,724,000   $ (722,000 ) $ 12,394,000   $ (19,470,000 ) Interest expense, net   10,284,000     12,546,000     46,696,000     55,550,000   Income tax expense   2,323,000     1,934,000     7,875,000     3,783,000   Depreciation and amortization   2,283,000     2,538,000     9,464,000     10,400,000   EBITDA $ 24,614,000   $ 16,296,000   $ 76,429,000   $ 50,263,000     Non-cash items impacting EBITDA Core and finished goods premium amortization $ 3,086,000   $ 2,725,000   $ 11,901,000   $ 10,738,000   Revaluation - cores on customers' shelves   785,000     489,000     3,590,000     2,805,000   Share-based compensation expenses   1,317,000     868,000     5,635,000     3,877,000   Foreign exchange impact of lease liabilities and forward contracts   1,487,000     (3,074,000 )   (8,924,000 )   15,892,000   Gain due to realignment of inventory at customer distribution centers   -     -     (643,000 )   -   Change in fair value of compound net derivative liability   (1,270,000 )   2,520,000     (1,130,000 )   60,000   Total non-cash items impacting EBITDA $ 5,405,000   $ 3,528,000   $ 10,429,000   $ 33,372,000     Cash items impacting EBITDA Transition expenses and severance   3,235,000     160,000     3,632,000     4,598,000   Net tariff costs paid for products sold before price increases were effective   -     4,607,000     2,124,000     4,607,000   Gain due to realignment of inventory at customer distribution centers   (6,547,000 )   -     (6,547,000 )   -   Total cash items impacting EBITDA $ (3,312,000 ) $ 4,767,000   $ (791,000 ) $ 9,205,000     Items Impacting Operating Income for the Three and Twelve Months Ended March 31, 2026 and 2025 Exhibit 6   Three Months Ended March 31, Twelve Months Ended March 31,       2026       2025       2026       2025   GAAP operating income $ 21,061,000   $ 16,278,000   $ 65,835,000   $ 39,923,000   Non-cash items impacting operating income Core and finished goods premium amortization $ 3,086,000   $ 2,725,000   $ 11,901,000   $ 10,738,000   Revaluation - cores on customers' shelves   785,000     489,000     3,590,000     2,805,000   Share-based compensation expenses   1,317,000     868,000     5,635,000     3,877,000   Foreign exchange impact of lease liabilities and forward contracts   1,487,000     (3,074,000 )   (8,924,000 )   15,892,000   Gain due to realignment of inventory at customer distribution centers   -     -     (643,000 )   -   Total non-cash items impacting operating income $ 6,675,000   $ 1,008,000   $ 11,559,000   $ 33,312,000     Cash items impacting operating income Transition expenses and severance   3,235,000     160,000     3,632,000     4,598,000   Net tariff costs paid for products sold before price increases were effective   -     4,607,000     2,124,000     4,607,000   Gain due to realignment of inventory at customer distribution centers   (6,547,000 )   -     (6,547,000 )   -   Total cash items impacting operating income $ (3,312,000 ) $ 4,767,000   $ (791,000 ) $ 9,205,000     View source version on businesswire.com: https://www.businesswire.com/news/home/20260608531553/en/

View stock analysis, news, and events for Motorcar Parts Of America, Inc.