Motorcar Parts of America (MPAA) investor relations material

Executive summary

• Fiscal 2027 Q1 net sales were $168.0 million, down 10.8% year-over-year, mainly due to lower rotating electrical sales, timing of orders, and competitor bankruptcy-driven inventory liquidations.

• Gross profit declined to $27.2 million (16.2% margin), with adjusted gross margin at 20.2% excluding non-cash and one-time items.

• Operating income dropped to $3.5 million from $20.1 million year-over-year; adjusted operating income was $11.2 million, including a $3.5 million negative FX impact.

• Net loss was $13.4 million ($0.71 per share) versus net income of $3.0 million last year, driven by lower sales, margin compression, and non-cash losses.

• On track to meet fiscal 2027 expectations, supported by new sales commitments, Centric Parts brake brands acquisition, and business developments.

Financial highlights

• Net sales: $168.0 million, down 10.8% year-over-year, impacted by timing of orders and lower rotating electrical sales.

• Gross margin for Q1 was 16.2% (GAAP), adjusted gross margin was 20.2%.

• Operating income: $3.5 million, down from $20.1 million year-over-year.

• Cash used in operating activities was $11.3 million due to inventory ramp-up; liquidity remains strong at $112.4 million.

• Net bank debt at quarter-end was $99.7 million; net bank debt to EBITDA ratio is 1.26.

Outlook and guidance

• Fiscal 2027 net sales expected to grow 7.5%-10.2% year-over-year, reaching $780-$800 million, excluding certain non-recurring items.

• Additional $100 million in annualized net sales expected by year-end, not included in guidance; annualized net sales projected to exceed $900 million by end of fiscal 2027.

• Operating income forecasted at $86-$91 million (12.3%-18.8% growth); EBITDA expected between $95-$100 million.

• Management expects sufficient liquidity for the next 12 months, supported by cash, receivable discount programs, and credit facility availability.

• Ongoing investments in distribution and manufacturing infrastructure to support strategic growth.