Motorcar Parts of America (MPAA) Misses Q3 EPS by 15c, Revenues Miss; Updated FY20 Revenue Outlook Below Consensus

Motorcar Parts of America (NASDAQ: MPAA) reported Q3 EPS of $0.28, $0.15 worse than the analyst estimate of $0.43. Revenue for the quarter came in at $127.7 million versus the consensus estimate of $139.1 million.

Net sales for the fiscal 2020 third quarter increased to $125.6 million for a record third quarter from $124.1 million for the same period a year earlier.

Adjusted net sales for the fiscal 2020 third quarter increased to $127.7 million for a record third quarter from $119.6 million a year earlier.

“Notwithstanding industry sales softness and the deferral of certain product orders late in the quarter, we achieved record sales and generated record cash flow from operations and improved margins. Our strategic investments are creating a transformative platform for growth, as we expand our position within the $125 billion aftermarket hard parts industry,” said Selwyn Joffe, chairman, president and chief executive officer of Motorcar Parts of America.

Net income for the fiscal 2020 third quarter was $865,000, or $0.04 per diluted share, compared with net loss of $3.1 million, or $0.16 per share, a year ago.

Adjusted net income for the fiscal 2020 third quarter was $5.5 million, or $0.28 per diluted share, compared with $6.7 million, or $0.35 per diluted share, a year earlier.

Gross profit for the fiscal 2020 third quarter was $27.7 million compared with $21.2 million a year earlier. Gross profit as a percentage of net sales for the fiscal 2020 third quarter was 22.0 percent compared with 17.0 percent a year earlier.

Adjusted gross profit for the fiscal 2020 third quarter was $34.3 million compared with $30.9 million a year ago. Adjusted gross profit as a percentage of adjusted net sales for the three months was 26.9 percent compared with 25.8 percent a year earlier.

The results for the fiscal 2020 third quarter gross margin were primarily impacted by two items totaling $5.8 million.

• Non-cash expenses of $3.7 million, including a write-down of $2.4 million associated with the quarterly revaluation for cores on customers' shelves, and $1.3 million of amortization related to the premium for core buy backs.
• Transition costs of $2.1 million associated with the move into the company’s new facilities in Mexico to support the growth in sales.

“Our footprint of the future is rapidly evolving and we expect to realize incremental benefits from our investments as we reach our target completion by the end of the second quarter of our new fiscal year,” Joffe added.

GUIDANCE:

Motorcar Parts of America sees FY2020 revenue of $534 million, versus the consensus of $557.72 million.

For earnings history and earnings-related data on Motorcar Parts of America (MPAA) click here.

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