LOS ANGELES, Feb. 11, 2008 (PRIME NEWSWIRE) -- Motorcar Parts of America, Inc. (Nasdaq:MPAA) today reported results for its fiscal third quarter ended December 31, 2007, reflecting continued progress in its strategic initiatives to reduce manufacturing costs and gain market share in a consolidating industry.
Net loss for the fiscal 2008 third quarter was reduced significantly to $183,000, or $0.02 per diluted share, compared with a net loss of $2.1 million, or $0.25 per diluted share, a year earlier. Operating income for the fiscal 2008 third quarter was $842,000 compared with an operating loss of $94,000 a year ago, supported by increased utilization of the company's manufacturing operations in Mexico and Malaysia. Net sales for the fiscal 2008 third quarter were $28.2 million compared with $33.3 million in the same period last year -- reflecting industry demand.
For the nine months ended December 31, 2007, net income was $1.9 million, or $0.16 per diluted share, compared with a net loss of $2.3 million, or $0.28 per diluted share, for the same period a year ago. Operating income for the nine months was $7.5 million compared with $1.7 million a year earlier. Net sales for the fiscal 2008 nine months were $97.4 million compared with net sales of $104.9 million for the comparable period last year. Excluding the $11.7 million of net sales associated with the discontinuation of the company's pay-on-scan arrangement in August 2006 with an automotive retailer, net sales for the nine months ended December 31, 2007 would have increased by $4.3 million, or approximately five percent compared with the same period last year.
Gross profit for the fiscal 2008 third quarter increased 28 percent to $7.5 million from $5.9 million for the same period a year ago. Gross margin was 27 percent for the fiscal 2008 third quarter compared with 18 percent a year earlier, due to lower manufacturing costs resulting from improvements in manufacturing efficiencies at the company's Mexican facility and decreases in customer marketing allowances during the third quarter of 2008 compared with the prior-year period.
"Results for the quarter reflect the incremental benefits of several key strategic initiatives -- including the company's ongoing focus on margin improvement through the relocation of a majority of manufacturing to Mexico from California and greater utilization of production at our long-time operation in Malaysia. In addition, during the quarter the company was successful in subleasing and closing its distribution facility in the Nashville region -- resulting in an estimated reduction of future expenses on an annualized basis of approximately $1.6 million. Particularly significant was the company's announcement last week of a three-year supply contract extension from a major automotive retailer for new and remanufactured alternators and starters with estimated aggregate net sales of approximately $50 million during the three-year contract extension term. The fourth quarter is off to a strong start and we look forward to reporting ongoing accomplishments for the balance of fiscal 2008," said Selwyn Joffe, chairman, president and chief executive officer of Motorcar Parts of America, Inc.
He also highlighted the company's announcement last week regarding management changes within the finance and accounting areas, with an emphasis on enhancing internal controls and streamlining operations. Joffe reiterated that both David Lee, the company's new chief financial officer, and Kevin Daly, who was promoted to the new position as chief accounting officer, would report to him.
He also noted the engagement of Ernst & Young LLP as the company's new independent registered public accounting firm.
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 9:00 a.m. Pacific time to discuss the company's financial results and operations for the quarter. The call will be open to all interested investors either through a live audio Web broadcast via the Internet at www.motorcarparts.com or live by calling (877)-675-4756 (domestic) or (719)-325-4929 (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 12:00 p.m. Pacific time Monday, February 11, through 11:59 p.m. Monday, February 18, by calling (888)-203-1112 (domestic) or (719)-457-0820 (international) and using access code: 7884530.
About Motorcar Parts of America
Motorcar Parts of America, Inc. is a remanufacturer of alternators and starters utilized in imported and domestic passenger vehicles and light trucks. Its products are sold to automotive retail outlets and the professional repair market throughout the United States and Canada, with facilities 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, including the expected benefits from its strategic initiatives, the recent extension of a multi-year supply agreement and the impact of future business derived from consolidation within the industry. 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 factor. 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 2007 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 Nine Months Ended -------------------------- -------------------------- December 31, December 31, 2007 2006 2007 2006 ------------ ------------ ------------ ------------ Net sales $ 28,182,000 $ 33,334,000 $ 97,443,000 $104,924,000 Cost of goods sold 20,694,000 27,479,000 71,509,000 86,955,000 ------------ ------------ ------------ ------------ Gross profit 7,488,000 5,855,000 25,934,000 17,969,000 Operating expenses: General and administrative 5,520,000 4,961,000 15,034,000 12,161,000 Sales and marketing 824,000 614,000 2,551,000 2,940,000 Research and development 302,000 374,000 852,000 1,131,000 ------------ ------------ ------------ ------------ Total operating expenses 6,646,000 5,949,000 18,437,000 16,232,000 ------------ ------------ ------------ ------------ Operating income (loss) 842,000 (94,000) 7,497,000 1,737,000 Interest expense -- net of interest income 1,257,000 1,883,000 4,444,000 4,019,000 ------------ ------------ ------------ ------------ Income (loss) before income tax expense (benefit) (415,000) (1,977,000) 3,053,000 (2,282,000) Income tax expense (benefit) (232,000) 151,000 1,179,000 30,000 ------------ ------------ ------------ ------------ Net income (loss) $ (183,000) $ (2,128,000) $ 1,874,000 $ (2,312,000) ============ ============ ============ ============ Basic net income (loss) per share $ (0.02) $ (0.25) $ 0.17 $ (0.28) ============ ============ ============ ============ Diluted net income (loss) per share $ (0.02) $ (0.25) $ 0.16 $ (0.28) ============ ============ ============ ============ Weighted average number of shares outstanding: -- basic 12,061,087 8,365,288 11,341,291 8,340,731 ============ ============ ============ ============ -- diluted 12,061,087 8,365,288 11,724,168 8,340,731 ============ ============ ============ ============ MOTORCAR PARTS OF AMERICA, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS December 31, March 31, 2007 2007 ------------ ------------ ASSETS (Unaudited) Current assets: Cash $ 464,000 $ 349,000 Short term investments 1,055,000 859,000 Accounts receivable -- net 2,514,000 2,259,000 Non-core inventory -- net 31,129,000 32,260,000 Inventory unreturned 4,712,000 3,886,000 Income tax receivable 6,000 1,670,000 Deferred income tax asset 7,232,000 6,768,000 Prepaid expenses and other current assets 1,321,000 1,873,000 ------------ ------------ Total current assets 48,433,000 49,924,000 Plant and equipment -- net 15,932,000 16,051,000 Long-term core inventory -- net 45,447,000 42,076,000 Long-term core inventory deposit 22,278,000 21,617,000 Deferred income tax asset 1,817,000 1,817,000 Other assets 445,000 501,000 ------------ ------------ TOTAL ASSETS $134,352,000 $131,986,000 ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 27,974,000 $ 42,756,000 Accrued liabilities 1,937,000 1,292,000 Accrued salaries and wages 2,836,000 2,780,000 Accrued workers' compensation claims 2,627,000 3,972,000 Income tax payable 66,000 285,000 Line of credit -- 22,800,000 Deferred compensation 1,057,000 859,000 Deferred income 133,000 133,000 Other current liabilities 522,000 225,000 Current portion of capital lease obligations 1,727,000 1,568,000 ------------ ------------ Total current liabilities 38,879,000 76,670,000 Deferred income, less current portion 155,000 255,000 Deferred core revenue 2,646,000 1,575,000 Deferred gain on sale-leaseback 1,470,000 1,859,000 Other liabilities 258,000 170,000 Capitalized lease obligations, less current portion 2,889,000 3,629,000 ------------ ------------ Total liabilities 46,297,000 84,158,000 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; 12,064,263 and 8,373,122 shares issued and outstanding at December 31, 2007 and March 31, 2007, respectively 121,000 84,000 Additional paid-in capital-common stock 92,461,000 56,241,000 Additional paid-in capital-warrant 1,879,000 -- Shareholder note receivable (682,000) (682,000) Accumulated other comprehensive income 257,000 40,000 Accumulated deficit (5,981,000) (7,855,000) ------------ ------------ Total shareholders' equity 88,055,000 47,828,000 ------------ ------------ TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $134,352,000 $131,986,000 ============ ============