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MPAA Nasdaq· Motorcar Parts of America Inc
Earnings report Q4 2023

Motorcar Parts of America, Inc. Reports Strong Revenue Growth in Latest Quarter

Segments of Revenue

Motorcar Parts of America, Inc. operates in three segments: (1) Remanufactured Starters and Alternators, (2) Brake Calipers, and (3) Other.

In the latest quarter ended December 31, 2023, the company reported consolidated net sales of $171.9 million, representing an increase of $20 million or 13.2% compared to the same period in the previous year. This growth in revenue was driven by strong demand across all product lines.

  • The Remanufactured Starters and Alternators segment contributed $110.3 million in net sales, accounting for approximately 64% of the total revenue.
  • The Brake Calipers segment generated $48.6 million in net sales, representing around 28% of the total revenue.
  • The Other segment contributed $13 million in net sales, accounting for approximately 8% of the total revenue.

Strengths

Motorcar Parts of America, Inc. demonstrated several strengths in its latest quarter performance. The company experienced strong demand across all product lines, which contributed to the significant increase in revenue. Additionally, the company's consolidated gross profit margin improved to 17.5% compared to 13.8% in the same period last year. This improvement can be attributed to increased utilization of facilities and the benefit of previously implemented price increases. Management comments indicate that the company's pricing strategy and operational efficiency initiatives have positively impacted its financial performance.

Challenges

While Motorcar Parts of America, Inc. reported strong revenue growth, there were certain challenges that impacted its financial performance. The company incurred additional expenses of $1.6 million and $2.4 million in the latest quarter, primarily due to disruptions in the supply chain. These costs affected the gross margin and highlight the potential vulnerability of the company to supply chain disruptions. Furthermore, the company is subject to various lawsuits, claims, and regulatory examinations, which pose potential legal and compliance risks.

Noteworthy

It is worth noting that Motorcar Parts of America, Inc. revised its segment reporting in the fourth quarter of fiscal 2023. The company determined that its three operating segments no longer met the criteria to be aggregated, resulting in a recast of prior year segment disclosures to align with the current year's presentation. This change in segment reporting provides investors with a more accurate and transparent view of the company's performance across its operating segments.

Summary

Motorcar Parts of America, Inc. delivered a strong performance in the latest quarter, with a significant increase in revenue driven by robust demand across all product lines. The company's consolidated gross profit margin also improved, reflecting increased facility utilization and the benefit of previous price increases. However, challenges such as supply chain disruptions and legal/regulatory risks should be monitored. Overall, Motorcar Parts of America, Inc. demonstrated resilience and strategic execution in capturing market opportunities, positioning itself for continued growth in the automotive parts industry.

Source documents

Form 10-Q  filed on Feb 09, 2024
143 pages scanned

Reference data

Company financials Q4 revenue 172M
Analyst estimates Q4 EPS missed by -437.50%
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