LOS ANGELES, Feb. 9, 2009 -- Motorcar Parts of America, Inc. (Nasdaq:MPAA) today reported a 27 percent increase in sales for its fiscal 2009 third quarter -- due primarily to an aging vehicle population and demand for its non-discretionary automotive aftermarket components.
Net sales for the fiscal 2009 third quarter ended December 31, 2008 were $35.8 million compared with $28.2 million for the same period last year. Gross profit for the fiscal 2009 third quarter increased 35.3 percent to $10.1 million from $7.5 million for the same period a year ago. Gross margin was 28.3 percent for the fiscal 2009 third quarter compared with 26.6 percent a year earlier, due primarily to increased sales, lower manufacturing costs and increased operating efficiencies -- which were partially offset by the impact of a significant reduction in scrap metal commodity prices in the fiscal 2009 third quarter.
Operating income for the fiscal 2009 third quarter was $509,000 compared with $842,000 a year ago -- reflecting the impact of a non-cash goodwill impairment charge of $2.1 million, or $0.11 per diluted share, and a non-cash charge of $1.35 million, or $0.07 per diluted share, recorded in general and administrative expenses to adjust for a significant decline in the value of the Mexican Peso as it related to foreign exchange currency contracts.
As a result of the items noted above, the company reported a net loss for its fiscal 2009 third quarter of $314,000, or $0.03 share, compared with a net loss of $183,000, or $0.02 per share, for the comparable period a year earlier.
Net sales for the fiscal 2009 nine-month period were $104.9 million compared with $97.4 million a year ago. Gross profit for the fiscal 2009 nine-month period was $33.5 million compared with $25.9 million a year earlier, with gross margin of 31.9 percent and 26.6 percent for the fiscal 2009 and fiscal 2008 nine-month periods, respectively.
Operating income for the same period increased 51.0 percent to $11.3 million from $7.5 million a year earlier, despite being impacted by a non-cash charge of $1.7 million, or $0.09 per diluted share, due to the significant decline in the value of the Mexican Peso, and the $2.1 million non-cash goodwill impairment charge, as described above.
Net income for the fiscal 2009 nine-month period increased sharply to $5.0 million, or $0.42 per diluted share, from $1.9 million, or $0.16 per diluted share, a year ago.
"Recent industry reports indicate there are bright spots within the automotive aftermarket sector as consumers delay new car purchases. This clearly bodes well for non-discretionary aftermarket parts, such as alternators and starters, and we look forward to further market expansion opportunities from current and new customers, as well as contributions from appropriate acquisitions that would benefit from the company's available capacity and low-cost manufacturing structure," said Selwyn Joffe, chairman, president and chief executive officer of Motorcar Parts.
"Unfortunately, our fiscal 2009 third quarter results were impacted by current stock market conditions that resulted in the company's market capitalization being significantly less than book value. Under applicable accounting standards, this situation has resulted in a non-cash write-off of our goodwill -- resulting in a net loss for the quarter. Other than the two non-cash write-downs, the company experienced a very strong third quarter," Joffe said.
Joffe noted the company's third quarter resulted in net cash generated by operating activities of $5.9 million.
Separately, the company announced its credit agreement with Union Bank, NA has been extended to April 15, 2010. At December 31, 2008, the balance of the revolving loan was $14.4 million after a $3.2 million pay-down by the company during the quarter.
Teleconference and Web Cast
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 for its fiscal 2009 third quarter. The call will be open to all interested investors either through a live audio Web broadcast at www.motorcarparts.com or live by calling (877)-718-5095 (domestic) or (719)-325-4758 (international). For those who are not available to listen to the live broadcast, the call will be archived for seven days on Motorcar Parts of America's website. A telephone playback of the conference call will also be available from approximately 1:00 p.m. Pacific time on Monday, February 9, 2009 through 9:00 p.m. Pacific time on Monday, February 16, 2009 by calling (888)-203-1112 (domestic) or (719)-457-0820 (international) and using access code: 4312256.
About Motorcar Parts of America
Motorcar Parts of America, Inc. is a remanufacturer of alternators and starters 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 and Canada, with remanufacturing facilities located in California, Mexico and Malaysia, and administrative offices located in California, Tennessee, Mexico, Singapore and Malaysia. 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 2008 and in its Form 10-Qs filed with the SEC thereafter 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 Income
(Unaudited)
Three Months Ended Nine Months Ended
December 31, December 31,
------------------------- --------------------------
2008 2007 2008 2007
----------- ----------- ------------ -----------
Net sales $35,802,000 $28,182,000 $104,944,000 $97,443,000
Cost of
goods
sold 25,672,000 20,694,000 71,428,000 71,509,000
----------- ----------- ------------ -----------
Gross
profit 10,130,000 7,488,000 33,516,000 25,934,000
Operating
expenses:
General and
admini-
strative 5,460,000 5,520,000 14,634,000 15,034,000
Sales and
marketing 1,555,000 824,000 3,911,000 2,551,000
Research
and
develop-
ment 515,000 302,000 1,558,000 852,000
Impairment
of
goodwill 2,091,000 -- 2,091,000 --
----------- ----------- ------------ -----------
Total
operating
expenses 9,621,000 6,646,000 22,194,000 18,437,000
----------- ----------- ------------ -----------
Operating
income 509,000 842,000 11,322,000 7,497,000
Other
expense
(income):
Interest
expense 1,204,000 1,292,000 3,188,000 4,494,000
Interest
income (1,000) (35,000) (19,000) (50,000)
----------- ----------- ------------ -----------
Income (loss)
before
income tax
expense
(benefit) (694,000) (415,000) 8,153,000 3,053,000
Income tax
expense
(benefit) (380,000) (232,000) 3,115,000 1,179,000
----------- ----------- ------------ -----------
Net income
(loss) $ (314,000) $ (183,000) $ 5,038,000 $ 1,874,000
=========== =========== ============ ===========
Basic net
income
(loss)
per
share $ (0.03) $ (0.02) $ 0.42 $ 0.17
=========== =========== ============ ===========
Diluted
net
income
(loss)
per
share $ (0.03) $ (0.02) $ 0.42 $ 0.16
=========== =========== ============ ===========
Weighted
average
number of
shares
outstanding:
Basic 11,962,021 12,061,087 12,006,619 11,341,291
=========== =========== ============ ===========
Diluted 11,962,021 12,061,087 12,101,685 11,724,168
=========== =========== ============ ===========
MOTORCAR PARTS OF AMERICA, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
December 31, 2008 March 31, 2008
----------------- --------------
ASSETS (Unaudited)
Current assets:
Cash $ 878,000 $ 1,935,000
Short-term investments 298,000 373,000
Accounts receivable net 10,637,000 2,789,000
Inventory-net 26,763,000 32,707,000
Inventory unreturned 4,398,000 4,124,000
Deferred income taxes 5,856,000 5,657,000
Prepaid expenses and
other current assets 1,189,000 1,608,000
------------- -------------
Total current assets 50,019,000 49,193,000
Plant and equipment-net 14,436,000 15,996,000
Long-term core inventory 63,870,000 50,808,000
Long-term core inventory
deposit 23,660,000 22,477,000
Long-term accounts
receivable -- 767,000
Long-term deferred income
taxes 2,182,000 1,357,000
Intangible assets - net 2,766,000 --
Other assets 844,000 810,000
------------- -------------
TOTAL ASSETS $ 157,777,000 $ 141,408,000
============= =============
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities:
Accounts payable $ 28,518,000 $ 32,401,000
Note payable 1,014,000 --
Accrued liabilities 1,421,000 2,200,000
Accrued salaries and wages 2,673,000 3,396,000
Accrued workers'
compensation claims 1,983,000 2,042,000
Income tax payable 1,447,000 392,000
Line of credit 14,400,000 --
Deferred compensation 298,000 373,000
Deferred income 133,000 133,000
Other current liabilities 1,633,000 448,000
Current portion of
capital lease
obligations 1,674,000 1,711,000
------------- -------------
Total current
liabilities 55,194,000 43,096,000
Deferred income, less
current portion 22,000 122,000
Deferred core revenue 4,320,000 2,927,000
Deferred gain on sale
-leaseback 974,000 1,340,000
Other liabilities 315,000 265,000
Capitalized lease
obligations, less current
portion 1,850,000 2,565,000
------------- -------------
Total liabilities 62,675,000 50,315,000
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,
20,000,000 shares
authorized; 11,962,021
and 12,070,555 shares
issued and outstanding
at December 31, 2008 120,000 121,000
and March 31, 2008,
respectively
Additional paid-in capital 92,395,000 92,663,000
Additional paid-in
capital-warrant 1,879,000 1,879,000
Shareholder note
receivable -- (682,000)
Accumulated other
comprehensive (loss)
income (1,082,000) 360,000
Accumulated earnings
(deficit) 1,790,000 (3,248,000)
------------- -------------
Total shareholders'
equity 95,102,000 91,093,000
------------- -------------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 157,777,000 $ 141,408,000
============= =============
CONTACT: Maier & Company, Inc.
Gary S. Maier
(310) 442-9852