MOTORCAR PARTS OF AMERICA REPORTS FISCAL FIRST QUARTER RESULTS (Form 8-K)

MOTORCAR PARTS OF AMERICA REPORTS FISCAL FIRST QUARTER RESULTS

- Record Sales and Gross Profit with Solid Cash Flow Generation -

LOS ANGELES, CA - August 11, 2025 - Motorcar Parts of America, Inc. (Nasdaq: MPAA) today reported results for its fiscal 2026 first quarter -- reflecting record sales and gross profit for a fiscal first quarter with solid cash flow generation.

Key highlights for the quarter:

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Net sales increased 10.9 percent to a first quarter record of $188.4 million.

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Gross profit increased 16.3 percent to a first quarter record of $33.9 million.

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Operating income increased to $20.1 million from an operating loss of $6.5 million in the prior year.

Fiscal 2026 First Quarter Results

Net sales for the fiscal 2026 first quarter increased 10.9 percent to a first quarter record of $188.4 million from $169.9 million in the prior year.

Gross profit for the quarter increased 16.3 percent to a first quarter record of $33.9 million from $29.2 million a year earlier. Gross margin for the same period was 18.0 percent compared with 17.2 percent a year earlier -- impacted by non-cash expenses of $3.9 million, or 2.1 percent, and cash expenses of $1.4 million, or 0.8 percent, as detailed in Exhibit 2.

Operating income for the fiscal 2026 first quarter increased to $20.1 million from an operating loss of $6.5 million in the prior year. Excluding the non-cash foreign exchange impact of lease liabilities and forward contracts, operating income increased 153.6 percent to $11.7 million compared with $4.6 million in the prior year.

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Interest expense for the fiscal 2026 first quarter decreased by $1.6 million to $12.8 million from $14.4 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 first quarter was $3.0 million, or $0.15 per diluted share, compared with a net loss of $18.1 million, or $0.92 per share, for the prior year. Net income benefitted from non-cash items of $1.3 million, or $0.07 per diluted share, primarily offset by cash expenses of $1.1 million, or $0.05 per diluted share, as detailed in Exhibit 1.

"We are pleased with our record first quarter results following a strong fiscal 2025 year. We remain focused on enhancing our supply chain and operating efficiencies as we continue to capitalize on the company's prominent position within the non-discretionary automotive aftermarket business," said Selwyn Joffe, chairman, president, and chief executive officer.

He noted favorable industry dynamics continue to drive the automotive aftermarket, including the increasing year-over-year number of vehicles on the road, coupled with an aging car parc climbing to a current 12.8 years in the United States.

Joffe emphasized that the company is continuing to work with its suppliers and customers to gain further efficiencies in our operations and supply chain. "The company's solid financial position and cash flow generation support our competitive position and expectations for future growth," Joffe said

He noted that the company has been proactively focused on significantly reducing reliance on Chinese suppliers for several years, which today represents less than 25 percent of parts and components sourced from China. "We remain optimistic about a successful resolution of current global economic events related to tariffs. Our established footprint in North America has strategic benefits, with further potential opportunities to reduce reliance on overseas supply sources and to help offset tariff costs," Joffe said.

Joffe highlighted that the company generated cash of approximately $10.0 million from operating activities during the fiscal 2026 first quarter compared with a use of cash of approximately $20.8 million from operating activities a year ago, and reduced net bank debt by $7.0 million to $74.4 million from $81.4 million.

Share Repurchase

During the fiscal 2026 first quarter, the company repurchased 197,796 shares for $2.0 million at an average share price of $9.94 under its current authorization program, supported by solid cash generation from operating activities. The company anticipates further opportunities to build shareholder value through enhanced profitability and strong cash generation.

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Fiscal 2026 Guidance Update

The company has increased its fiscal 2026 sales guidance since issuing annual guidance in June. This increase reflects a strong start to its fiscal year and incorporates the impact of tariff passthroughs. The company's increased sales guidance is now between $800 million to $820 million, representing between 5.6 percent and 8.3 percent year-over-year growth. The company reaffirms its operating income guidance range to between $86 million and $91 million, representing 4.3 percent and 10.4 percent year-over-year growth -- reflecting a combination of tariff passthroughs and cost mitigation measures. The company estimates depreciation and amortization will be approximately $11 million. These estimates reflect the expected impact of tariffs enacted as of August 11, 2025, and do not include certain non-cash items and one-time expenses.

Use of Non-GAAP Measure