Motorcar Parts of America, Inc.

Fiscal first quarter ended June 30, 2026 net sales were $168 million. Gross margin was 16.2% versus 18% a year ago; excluding noncash expenses of 2.4% and one-time items of 1.6%, gross margin was 20.2%. Foreign exchange reduced gross margin by approximately 2%, or about $3.5 million, and lower sales from timing of orders also hurt results. The company used $11.3 million in operating cash flow in the quarter, repurchased 130 thousand shares for $1.9 million at an average price of $14.98, and ended with net bank debt of $99.7 million. Liquidity was about $112.4 million, and remaining authorization for share repurchases was $20.1 million. For fiscal 2027, management reaffirmed net sales guidance of $780 million to $800 million, operating income of $86 million to $91 million, EBITDA of $95 million to $100 million, and said annualized net sales should be more than $900 million by the end of the year.

Selwyn Joffe struck a confident tone and said the company remains on target for fiscal 2027 despite first-quarter headwinds. He emphasized strengthening positioning in nondiscretionary automotive aftermarket categories, especially brake-related products, and highlighted the Centric Parts acquisition as a meaningful growth opportunity with strong brand recognition and customer feedback. He also pointed to favorable industry fundamentals, including a higher average vehicle age and more vehicles on the road, plus growing demand in heavy-duty, Mexico, and diagnostic businesses.

David Lee focused on the quarter’s financial mechanics: $168 million of net sales, 16.2% gross margin, and pressure from FX, timing of orders, and noncash/one-time items. He said operating cash flow was negative $11.3 million because of working capital use tied to an inventory ramp for new business, but noted liquidity remained strong at about $112.4 million and net bank debt to adjusted EBITDA was 1.26. He also highlighted $1.9 million of share repurchases, $20.1 million left on the authorization, and the PNC loan extension through August 2031.

There were no analyst questions on the call, so there was no back-and-forth on specific concerns. Management’s comments instead centered on guidance, the timing of new-business ramps, the impact of customers working through liquidated inventory from a prior supplier, and the decision to keep more than $100 million of expected annualized sales out of guidance until timing is clearer.