Motorcar Parts of America Reports Strong Fiscal Second Quarter Results

LOS ANGELES--( BUSINESS WIRE)--Motorcar Parts of America, Inc. (Nasdaq: MPAA) today reported results for its fiscal 2026 second quarter -- reflecting record sales and record gross profit for a fiscal second quarter with strong cash flow generation.

Key highlights for the quarter:

Fiscal 2026 Second Quarter Results

Net sales for the fiscal 2026 second quarter increased $13.3 million, or 6.4 percent, to $221.5 million from $208.2 million in the prior year. Net sales for the quarter reflect $14.8 million of core revenue in connection with the realignment of inventory at certain customer distribution centers offset by the timing of purchases by one of our largest customers.

Gross profit was a second quarter record of $42.7 million compared with $41.3 million a year earlier. Gross margin for the same period was 19.3 percent compared with 19.8 percent a year earlier -- impacted by non-cash expenses of $3.6 million, or 3.0 percent, and one-time cash expenses of $698,000, or 0.3 percent, as detailed in Exhibit 2.

Operating income for the fiscal 2026 second quarter increased 30.8 percent to $16.4 million from $12.5 million in the prior year.

Interest expense for the fiscal 2026 second quarter decreased by $1.5 million to $12.7 million from $14.2 million a year ago, reflecting lower average outstanding balances under the company’s credit facility and lower interest rates compared with a year ago.

Net loss for the fiscal 2026 second quarter was $2.1 million, or $0.11 per share, compared with a net loss of $3.0 million, or $0.15 per share, for the prior year. Net loss was impacted by non-cash expenses of $4.8 million, or $0.25 per share, and one-time cash expenses of $523,000, or $0.03 per share, as detailed in Exhibit 1.

“Results for the fiscal second quarter reflect continued success at leveraging the company’s prominent position within the non-discretionary automotive aftermarket and North American footprint,” said Selwyn Joffe, chairman, president, and chief executive officer.

He noted favorable industry dynamics remain catalysts for automotive aftermarket growth -- which include an increasing number of vehicles on the road and an aging car parc climbing to a current 12.8 years in the United States.

“The company’s solid financial position, cash flow generation and continued net debt reduction should continue to enhance our competitive position and support opportunities in a rapidly changing industry environment,” Joffe said.

Joffe highlighted that the company generated cash of approximately $21.9 million from operating activities during the fiscal 2026 second quarter and reduced net bank debt by $17.7 million to $56.7 million from $74.4 million. He also highlighted that the company generated cash of approximately $31.9 million during the six-month period compared with $2.0 million for the prior year and reduced net bank debt by $24.6 million to $56.7 million from $81.4 million.

Six-Month Results

Net sales for the fiscal 2026 six-month period increased 31.8 million, or 8.4 percent, to a record $409.8 million from $378.1 million. Net sales for the six-month period reflect $14.8 million of core revenue in connection with the realignment of inventory at certain customer distribution centers offset by the timing of purchases by one of our largest customers.

Gross profit for the fiscal 2026 six-month period increased to a record $76.6 million from $70.5 million a year earlier. Gross margin for the fiscal 2026 six-month period was 18.7 percent compared with 18.6 percent a year earlier. Gross margin for the fiscal 2026 six-month period was impacted by non-cash expenses of $7.4 million, or 2.5 percent, and one-time cash expenses of $2.1 million, or 0.5 percent, as detailed in Exhibit 4.

Interest expense decreased by $3.1 million for the six months to $25.5 million from $28.6 million a year ago, reflecting lower average outstanding balances under the company’s credit facility and lower interest rates compared with a year ago.

Net income for the fiscal 2026 six-month period was $893,000, or $0.04 per diluted share, impacted by non-cash expenses of $3.5 million, or $0.17 per diluted share, and one-time cash expenses of $1.6 million, or $0.08 per diluted share, compared with a net loss of $21.0 million, or $1.07 per share, a year ago, impacted by various items detailed in Exhibit 2.

Share Repurchase

During the fiscal 2026 second quarter, the company repurchased 90,114 shares for $1.4 million at an average share price of $15.41 under its current authorization program, supported by solid cash generation from operating activities. For the six-month period, the company repurchased 287,910 shares for $3.4 million at an average share price of $11.65.

The company anticipates further opportunities to build shareholder value through enhanced profitability and strong cash generation.

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 November 10, 2025 through 8:59 p.m. Pacific time on November 17, 2025 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, turbochargers, 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 2025 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

(Unaudited)

Three Months Ended

Six Months Ended

September 30,

2025

2024

2025

2024

221,470,000

208,186,000

409,834,000

378,073,000

178,743,000

166,909,000

333,190,000

307,622,000

42,727,000

41,277,000

76,644,000

70,451,000

17,086,000

15,052,000

29,766,000

31,722,000

6,811,000

5,834,000

13,021,000

11,283,000

3,928,000

2,443,000

7,234,000

4,876,000

(1,469,000

)

5,428,000

(9,817,000

)

16,506,000

26,356,000

28,757,000

40,204,000

64,387,000

16,371,000

12,520,000

36,440,000

6,064,000

12,699,000

14,182,000

25,511,000

28,569,000

2,260,000

380,000

4,050,000

(2,200,000

)

14,959,000

14,562,000

29,561,000

26,369,000

1,412,000

(2,042,000

)

6,879,000

(20,305,000

)

3,561,000

912,000

5,986,000

734,000

(2,149,000

)

(2,954,000

)

893,000

(21,039,000

)

(0.11

)

(0.15

)

0.05

(1.07

)

(0.11

)

(0.15

)

0.04

(1.07

)

19,366,633

19,760,028

19,367,840

19,717,517

19,366,633

19,760,028

20,194,954

19,717,517

MOTORCAR PARTS OF AMERICA, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

September 30, 2025

March 31, 2025

ASSETS

(Unaudited)

15,710,000

9,429,000

2,025,000

1,881,000

104,010,000

91,064,000

372,590,000

359,669,000

30,306,000

29,606,000

22,091,000

19,822,000

546,732,000

511,471,000

32,292,000

31,990,000

67,208,000

66,603,000

5,897,000

4,569,000

331,344,000

336,268,000

3,603,000

3,757,000

2,892,000

2,978,000

989,968,000

957,636,000

196,245,000

172,117,000

38,058,000

34,411,000

52,588,000

38,158,000

72,419,000

90,787,000

5,709,000

5,570,000

9,763,000

9,982,000

374,782,000

351,025,000

43,444,000

35,207,000

243,582,000

241,404,000

640,000

362,000

61,031,000

65,308,000

7,953,000

6,631,000

731,432,000

699,937,000

195,000

194,000

232,182,000

234,413,000

20,926,000

20,033,000

5,233,000

3,059,000

258,536,000

257,699,000

989,968,000

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 six months ended September 30, 2025 and 2024. 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.

Exhibit 1

Items Impacting Net Income for the Three Months Ended September 30, 2025 and 2024

Three Months Ended September 30,

2025

2024

Per Diluted

(2,149,000

)

(0.11

)

(2,954,000

)

(0.15

)

2,988,000

0.15

2,621,000

0.13

1,225,000

0.06

1,164,000

0.06

1,984,000

0.10

1,016,000

0.05

(1,469,000

)

(0.08

)

5,428,000

0.27

(643,000

)

(0.03

)

2,260,000

0.12

380,000

0.02

(1,586,000

)

(0.08

)

(2,652,000

)

(0.13

)

4,759,000

0.25

7,957,000

0.40

1,498,000

0.08

698,000

0.04

(175,000

)

(0.01

)

(375,000

)

(0.02

)

523,000

0.03

1,123,000

0.06

(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 September 30, 2024, consists of $1,298,000 impacting gross profit and $200,000 included in operating expenses.

Exhibit 2

Items Impacting Net Income for the Six Months Ended September 30, 2025 and 2024

Six Months Ended September 30,

2025

2024

Per Diluted

893,000

0.04

(21,039,000

)

(1.07

)

5,835,000

0.29

5,349,000

0.27

2,251,000

0.11

1,558,000

0.08

2,930,000

0.15

2,016,000

0.10

(9,817,000

)

(0.49

)

16,506,000

0.84

(643,000

)

(0.03

)

4,050,000

0.20

(2,200,000

)

(0.11

)

(1,152,000

)

(0.06

)

(5,807,000

)

(0.29

)

3,454,000

0.17

17,422,000

0.88

4,438,000

0.23

2,124,000

0.11

(531,000

)

(0.03

)

(1,110,000

)

(0.06

)

1,593,000

0.08

3,328,000

0.17

(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 six months ended September 30, 2024, consists of $1,298,000 impacting gross profit and $3,140,000 included in operating expenses.

Exhibit 3

Items Impacting Gross Profit for the Three Months Ended September 30, 2025 and 2024

Three Months Ended September 30,

2025

2024

Gross

Margin

Gross

Margin

42,727,000

19.3

41,277,000

19.8

2,988,000

1.3

2,621,000

1.3

1,225,000

0.6

1,164,000

0.6

(643,000

)

1.1

3,570,000

3.0

3,785,000

1.8

1,298,000

0.6

698,000

0.3

698,000

0.3

1,298,000

0.6

(a)

gross margin reflecting impact to net sales and cost of goods sold

Exhibit 4

Items Impacting Gross Profit for the Six Months Ended September 30, 2025 and 2024

Six Months Ended September 30,

2025

2024

Gross

Margin

Gross

Margin

76,644,000

18.7

70,451,000

18.6

5,835,000

1.4

5,349,000

1.4

2,251,000

0.5

1,558,000

0.4

(643,000

)

0.5

7,443,000

2.5

6,907,000

1.8

1,298,000

0.3

2,124,000

0.5

2,124,000

0.5

1,298,000

0.3

Exhibit 5

Items Impacting EBITDA for the Three and Six Months Ended September 30, 2025 and 2024

Three Months Ended

September 30,

Six Months Ended

September 30,

2025

2024

2025

2024

(2,149,000

)

(2,954,000

)

893,000

(21,039,000

)

12,699,000

14,182,000

25,511,000

28,569,000

3,561,000

912,000

5,986,000

734,000

2,373,000

2,601,000

4,822,000

5,330,000

16,484,000

14,741,000

37,212,000

13,594,000

2,988,000

2,621,000

5,835,000

5,349,000

1,225,000

1,164,000

2,251,000

1,558,000

1,984,000

1,016,000

2,930,000

2,016,000

(1,469,000

)

5,428,000

(9,817,000

)

16,506,000

(643,000

)

(643,000

)

2,260,000

380,000

4,050,000

(2,200,000

)

6,345,000

10,609,000

4,606,000

23,229,000

1,498,000

4,438,000

698,000

2,124,000

698,000

1,498,000

2,124,000

4,438,000