For the fiscal fourth quarter ended March 31, 2019, Motorcar Parts of America (MPA) came through with a record $129.08 million in net sales — an increase of 7.8% over the previous year.
The company’s gross profit declined 10.8% to $25.95 million, with gross margin slipping from 24.3% a year ago to 20.1% for the three months ended March 31, 2019. However, adjusted gross profit increased 7.4% to $39 million, and adjusted gross margin was unchanged at 29.4%. This takes into account such factors as return and stock adjustment accruals related to new business and product line expansion, the revaluation of cores on customers’ shelves and inventory set-up amortization, and transition costs associated with moving into a larger consolidated distribution center.
For the quarter, MPA reported a net loss of $2.77 million — an $11.14-million downturn from the $8.38 million in net income the company posted a year ago. Adjusting for various factors (including those noted above), MPA’s adjusted net income rose 14.1% to $12.02 million.
GUIDANCE … Management expects adjusted net sales for the fiscal year ending March 31, 2020 to come in between $552 million and $562 million, representing between 16% and 18% organic growth year-over-year. Further, the company expects its sales to “significantly” ramp up in the second half of the year.
Adjusted gross margin for fiscal year 2020 is expected to be approximately 27% — or unchanged compared to fiscal 2019 — attributable to product mix and the launch of new products. Without giving specific guidance, MPA noted that its profitability and cash flow are expected to improve on a year-over-year basis.
In related news, MPA plans to institute price increases across all existing product lines beginning in the latter part of this year.