LOS ANGELES, Nov. 4, 2009 -- Motorcar Parts of America, Inc. (Nasdaq:MPAA) today reported results for its 2010 fiscal second quarter, supported by increased demand for alternator and starter replacements and the benefits of a gain from the recent acquisition of Reliance Automotive.
Net income for the fiscal 2010 second quarter ended September 30, 2009 increased 48 percent to $3.4 million, or $0.28 per diluted share, compared with $2.3 million or $0.19 per diluted share, a year ago. Results for the fiscal 2010 second quarter included a $1.3 million gain, or $0.07 per diluted share, related to the company's acquisition of Reliance Automotive completed in August.
Net sales for the fiscal 2010 second quarter increased 8.2 percent to $39.4 million compared with $36.4 million for the same period last year. This increase was primarily due to net sales to new customers acquired in the recent acquisition of Reliance Automotive and other increases in net sales. In addition, net sales for the quarter benefited from the recognition of $845,000 of previously deferred core revenue due to entering into a new customer contract.
Gross profit for the fiscal 2010 second quarter was $10.8 million compared with $11.9 million for the same period a year ago. Gross profit as a percentage of net sales for the second quarter was 27.4 percent compared with 32.7 percent a year ago and 21.9 percent in the fiscal 2010 first quarter. Gross margin for the second quarter was impacted by increased packaging costs, a reduction in scrap metal prices resulting in decreased scrap metal revenues and an increase in the provision for inventory reserves, which offset lower manufacturing costs compared to the prior year.
For the fiscal 2010 six-month period, net income was $4.6 million, or $0.38 per diluted share, compared with $5.4 million, or $0.44 per diluted share, a year earlier. Net sales for the six months were $72.1 million compared with $69.1 million a year ago.
Gross profit for the fiscal 2010 six-month period was $18.0 million compared with $23.4 million for the same period a year ago. Gross profit as a percentage of net sales for the fiscal 2010 six-month period was 24.9 percent compared with 33.8 percent a year ago. The six-month period a year earlier benefited from the reversal of a $1.3 million accrual related to customs duty claims; higher scrap metal revenues of $1.3 million; lower packaging costs, a lower provision for inventory reserves and other lower period costs. In addition, gross profit for the fiscal 2009 six-month period was positively impacted by an acceleration of promotional allowances in the fourth quarter of fiscal 2008, caused by an amendment to a customer agreement, which otherwise would have been earned by a customer during fiscal 2009 of $1.5 million.
"Results for the quarter highlight the strength of the sales momentum that started late in the first quarter, as well as initial sales contributions derived from a recent acquisition that offers additional growth opportunities, " said Selwyn Joffe, chairman, president and chief executive officer of Motorcar Parts. "We continue to be encouraged by the volume of business from existing and new customers and remain focused on capitalizing on our manufacturing capacity and operating leverage to increase profitability," Joffe added.
He highlighted the company's recently announced new credit facility and anticipated further balance sheet improvements as complementary to Motorcar Parts of America's strategy to grow organically and through acquisitions.
General and administrative expenses for the fiscal 2010 second quarter decreased 26.5 percent to $3.7 million from $5.0 million a year earlier -- primarily due to a non-cash gain in currency mark-to-market accounting for foreign exchange contracts of $699,000, and a decrease in professional fees; and other general and administration expenses.
Teleconference and Web Cast
Selwyn Joffe, chairman, president and chief executive officer, and David Lee, chief financial officer, will host an investor conference call on Monday, November 9, 2009 at 10:00 a.m. Pacific time to discuss the company's financial results and operations for the fiscal 2010 second 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 (888)-726-2413 (domestic) or (913)-312-1458 (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 1:00 p.m. Pacific time on Monday, November 9, 2009 through midnight Pacific Time on Monday, November 16, 2009 by calling (888)-203-1112 (domestic) or (719)-457-0820 (international) and using access code: 6418347.
As previously announced, the company is scheduled to make a presentation at the Gabelli 33rd Annual Aftermarket Symposium at 12:00 p.m. Pacific time today at the Bellagio Las Vegas. A live webcast of the presentation will be available through the link www.motorcarparts.com and archived for a period of 90 days.
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 2009 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 Operations
(Unaudited)
Three Months Ended Six Months Ended
September 30, September 30,
------------------------ ------------------------
2009 2008 2009 2008
----------- ----------- ----------- -----------
Net sales $39,437,000 $36,437,000 $72,127,000 $69,142,000
Cost of
goods sold 28,621,000 24,531,000 54,140,000 45,756,000
----------- ----------- ----------- -----------
Gross profit 10,816,000 11,906,000 17,987,000 23,386,000
Operating
expenses:
General and
administrative 3,653,000 4,972,000 6,165,000 9,174,000
Sales and
marketing 1,535,000 1,344,000 2,807,000 2,356,000
Research and
development 334,000 581,000 668,000 1,043,000
----------- ----------- ----------- -----------
Total
operating
expenses 5,522,000 6,897,000 9,640,000 12,573,000
----------- ----------- ----------- -----------
Operating income 5,294,000 5,009,000 8,347,000 10,813,000
Other expense
(income):
Gain on
acquisition (1,331,000) -- (1,331,000) --
Interest
expense 974,000 1,152,000 1,970,000 1,984,000
Interest
income -- (4,000) -- (18,000)
----------- ----------- ----------- -----------
Income before
income tax
expense 5,651,000 3,861,000 7,708,000 8,847,000
Income tax
expense 2,216,000 1,541,000 3,078,000 3,495,000
----------- ----------- ----------- -----------
Net income $ 3,435,000 $ 2,320,000 $ 4,630,000 $ 5,352,000
=========== =========== =========== ===========
Basic net
income per
share $ 0.29 $ 0.19 $ 0.39 $ 0.44
=========== =========== =========== ===========
Diluted net
income per
share $ 0.28 $ 0.19 $ 0.38 $ 0.44
=========== =========== =========== ===========
Weighted average
number of
shares
outstanding:
Basic 11,973,510 11,987,975 11,967,797 12,029,039
=========== =========== =========== ===========
Diluted 12,101,997 12,130,280 12,086,298 12,158,376
=========== =========== =========== ===========
MOTORCAR PARTS OF AMERICA, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
September 30, March 31,
2009 2009
------------- -------------
ASSETS (Unaudited)
Current assets:
Cash $ 1,633,000 $ 452,000
Short-term investments 390,000 335,000
Accounts receivable -- net 12,509,000 11,121,000
Inventory -- net 27,785,000 27,923,000
Inventory unreturned 4,269,000 4,708,000
Deferred income taxes 8,280,000 8,277,000
Prepaid expenses and other
current assets 1,573,000 1,355,000
------------- -------------
Total current assets 56,439,000 54,171,000
Plant and equipment -- net 13,289,000 13,997,000
Long-term core inventory 63,993,000 62,821,000
Long-term core inventory deposit 25,768,000 24,451,000
Long-term deferred income taxes 480,000 989,000
Intangible assets -- net 6,690,000 2,564,000
Other assets 512,000 595,000
------------- -------------
TOTAL ASSETS $ 167,171,000 $ 159,588,000
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 29,635,000 $ 24,507,000
Note payable 133,000 722,000
Accrued liabilities 1,513,000 1,451,000
Accrued salaries and wages 2,365,000 3,162,000
Accrued workers' compensation claims 1,600,000 1,895,000
Income tax payable 909,000 1,158,000
Line of credit 23,700,000 21,600,000
Other current liabilities 597,000 1,624,000
Current portion of capital
lease obligations 1,577,000 1,621,000
------------- -------------
Total current liabilities 62,029,000 57,740,000
Deferred core revenue 5,509,000 5,934,000
Deferred gain on sale-leaseback 581,000 843,000
Other liabilities 713,000 587,000
Capitalized lease obligations, less
current portion 637,000 1,401,000
------------- -------------
Total liabilities 69,469,000 66,505,000
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;
11,996,021 and 11,962,021 shares
issued and outstanding at September
30, 2009 and March 31, 2009,
respectively 120,000 120,000
Additional paid-in capital 92,680,000 92,459,000
Additional paid-in capital-warrant 1,879,000 1,879,000
Accumulated other comprehensive loss (2,216,000) (1,984,000)
Retained earnings 5,239,000 609,000
------------- -------------
Total shareholders' equity 97,702,000 93,083,000
------------- -------------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 167,171,000 $ 159,588,000
============= =============
CONTACT: Maier & Company, Inc.
Gary S. Maier
(310) 442-9852