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

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.

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