NEWS RELEASE

CONTACT:

Gary S. Maier

Vice President, Corporate Communications & IR

(310) 972-5124

MOTORCAR PARTS OF AMERICA REPORTS FISCAL FIRST QUARTER RESULTS

- Record Sales and Gross Profit with Solid Cash Flow Generation -

Key highlights for the quarter:

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Net sales increased 10.9 percent to a first quarter record of $188.4 million.

•

Gross profit increased 16.3 percent to a first quarter record of $33.9 million.

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Operating income increased to $20.1 million from an operating loss of $6.5 million in the prior year.

Fiscal 2026 First Quarter Results

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Interest expense for the fiscal 2026 first quarter decreased by $1.6 million to $12.8 million from $14.4 million a year ago, reflecting lower average outstanding balances under the company’s credit facility and lower interest rates compared with a year ago.

Net income for the fiscal 2026 first quarter was $3.0 million, or $0.15 per diluted share, compared with a net loss of $18.1 million, or $0.92 per share, for the prior year.  Net income benefitted from non-cash items of $1.3 million, or $0.07 per diluted share, primarily offset by cash expenses of $1.1 million, or $0.05 per diluted share, as detailed in Exhibit 1.

“We are pleased with our record first quarter results following a strong fiscal 2025 year.  We remain focused on enhancing our supply chain and operating efficiencies as we continue to capitalize on the company’s prominent position within the non-discretionary automotive aftermarket business,” said Selwyn Joffe, chairman, president, and chief executive officer.

He noted favorable industry dynamics continue to drive the automotive aftermarket, including the increasing year-over-year number of vehicles on the road, coupled with an aging car parc climbing to a current 12.8 years in the United States.

 Joffe emphasized that the company is continuing to work with its suppliers and customers to gain further efficiencies in our operations and supply chain.  “The company’s solid financial position and cash flow generation support our competitive position and expectations for future growth,” Joffe said

He noted that the company has been proactively focused on significantly reducing reliance on Chinese suppliers for several years, which today represents less than 25 percent of parts and components sourced from China. “We remain optimistic about a successful resolution of current global economic events related to tariffs.  Our established footprint in North America has strategic benefits, with further potential opportunities to reduce reliance on overseas supply sources and to help offset tariff costs,” Joffe said.

Joffe highlighted that the company generated cash of approximately $10.0 million from operating activities during the fiscal 2026 first quarter compared with a use of cash of approximately $20.8 million from operating activities a year ago, and reduced net bank debt by $7.0 million to $74.4 million from $81.4 million.

Share Repurchase

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Fiscal 2026 Guidance Update

The company has increased its fiscal 2026 sales guidance since issuing annual guidance in June.  This increase reflects a strong start to its fiscal year and incorporates the impact of tariff passthroughs.  The company’s increased sales guidance is now between $800 million to $820 million, representing between 5.6 percent and 8.3 percent year-over-year growth.  The company reaffirms its operating income guidance range to between $86 million and $91 million, representing 4.3 percent and 10.4 percent year-over-year growth -- reflecting a combination of tariff passthroughs and cost mitigation measures.  The company estimates depreciation and amortization will be approximately $11 million.  These estimates reflect the expected impact of tariffs enacted as of August 11, 2025, and do not include certain non-cash items and one-time expenses.

Use of Non-GAAP Measure

This press release includes the following non-GAAP measure – EBITDA, which is not a measure of financial performance under GAAP and should not be considered as an alternative to net income as a measure of financial performance. The company believes this non-GAAP measure, when considered together with the corresponding GAAP measures, provides useful information to investors and management regarding financial and business trends relating to the company’s results of operations. However, this non-GAAP measure has significant limitations in that it does not reflect all the costs and other items associated with the operation of the company’s business as determined in accordance with GAAP. In addition, the company’s non-GAAP measures may be calculated differently and are therefore not comparable to similar measures by other companies. Therefore, investors should consider non-GAAP measures in addition to, and not as a substitute for, or superior to, measures of financial performance in accordance with GAAP. For a definition and reconciliation of EBITDA to net income, its corresponding GAAP measure, see the financial tables included in this press release. Also, refer to our Form 8-K to which this release is attached, and other filings we make with the SEC, for further information regarding this measure.

Earnings Conference Call and Webcast

Selwyn Joffe, chairman, president and chief executive officer, and David Lee, chief financial officer, will host an investor conference call today at 10:00 a.m. Pacific time to discuss the company’s financial results and operations. The call will be open to all interested investors either through a live audio webcast at www.motorcarparts.com or live by calling (888) 440-5584 (domestic) or (646) 960-0457 (international). For those who are not available to listen to the live broadcast, the call will be archived on Motorcar Parts of America’s website www.motorcarparts.com. A telephone playback of the conference call will also be available from approximately 1:00 p.m. Pacific time on August 11, 2025 through 8:59 p.m. Pacific time on August 18, 2025 by calling (800) 770-2030 (domestic) or (609) 800-9909 (toll) and using access code: 1545314.

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About Motorcar Parts of America, Inc.

 

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. 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 factors. 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 2025 and in its Forms 10-Q filed with the SEC 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.

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(Financial tables follow)

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		June 30, 2025				March 31, 2025
ASSETS		(Unaudited)
Current assets:
Cash and cash equivalents		$	12,479,000			$	9,429,000
Short-term investments			2,011,000				1,881,000
Accounts receivable —net			85,532,000				91,064,000
Inventory — net			366,772,000				359,669,000
Contract assets			30,329,000				29,606,000
Prepaid expenses and other current assets			22,259,000				19,822,000
Total current assets			519,382,000				511,471,000
Plant and equipment — net			33,194,000				31,990,000
Operating lease assets			68,281,000				66,603,000
Long-term deferred income taxes			5,504,000				4,569,000
Long-term contract assets			340,529,000				336,268,000
Goodwill and intangible assets — net			3,693,000				3,757,000
Other assets			2,767,000				2,978,000
TOTAL ASSETS		$	973,350,000			$	957,636,000
LIABILITIES AND SHAREHOLDERS'  EQUITY
Current liabilities:
Accounts payable and accrued liabilities		$	176,269,000			$	172,117,000
Customer finished goods returns accrual			32,926,000				34,411,000
Contract liabilities			49,396,000				38,158,000
Revolving loan			86,856,000				90,787,000
Other current liabilities			4,973,000				5,570,000
Operating lease liabilities			10,196,000				9,982,000
Total current liabilities			360,616,000				351,025,000
Convertible notes, related party			40,844,000				35,207,000
Long-term contract liabilities			240,021,000				241,404,000
Long-term deferred income taxes			488,000				362,000
Long-term operating lease liabilities			63,056,000				65,308,000
Other liabilities			8,212,000				6,631,000
Total liabilities			713,237,000				699,937,000
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, 50,000,000 shares authorized; 19,352,135 and 19,435,706 shares issued and outstanding at June 30, 2025 and March 31, 2025, respectively			194,000				194,000
Additional paid-in capital			232,897,000				234,413,000
Retained earnings			23,075,000				20,033,000
Accumulated other comprehensive income			3,947,000				3,059,000
Total shareholders' equity			260,113,000				257,699,000
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$	973,350,000			$	957,636,000