Motorcar Parts of America, Inc. (MPAA) swung to a net profit for the quarter ended Sep. 30, 2016. The company has made a net profit of $9.14 million, or $ 0.47 a share in the quarter, against a net loss of $1.39 million, or $0.08 a share in the last year period. On the other hand, adjusted net income for the quarter stood at $12.43 million, or $0.64 a share compared with $11.79 million or $0.62 a share, a year ago.
Revenue during the quarter grew 18.73 percent to $108.84 million from $91.67 million in the previous year period. Gross margin for the quarter expanded 437 basis points over the previous year period to 28.17 percent. Total expenses were 84.22 percent of quarterly revenues, down from 99.65 percent for the same period last year. This has led to an improvement of 1543 basis points in operating margin to 15.78 percent.
Operating income for the quarter was $17.18 million, compared with $0.32 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $24.47 million compared with $22.68 million in the prior year period. At the same time, adjusted EBITDA margin contracted 226 basis points in the quarter to 22.48 percent from 24.74 percent in the last year period.
"As we commence the second half of fiscal 2017, we are well-positioned within the aftermarket industry. We anticipate solid growth in all of our product lines, and we are encouraged by the numerous additional opportunities we are seeing," said Selwyn Joffe, chairman, president and chief executive officer of Motorcar Parts of America. "Results for the quarter reflect continued strength of our business - supported by an aging vehicle population, increased miles driven and related factors, all of which continue to contribute to overall growth in the aftermarket industry. As always, we thank our entire team for their day-in and day-out commitment to excellence and our company," Joffe said.
Working capital turns positive
Working capital of Motorcar Parts of America, Inc. has turned positive to $3.86 million on Sep. 30, 2016 from negative $3.50 million on Sep. 30, 2015. Current ratio was at 1.03 as on Sep. 30, 2016, up from 0.97 on Sep. 30, 2015.
Cash conversion cycle (CCC) has increased to 24 days for the quarter from 2 days for the last year period. Days sales outstanding went up to 11 days for the quarter compared with 6 days for the same period last year.
Days inventory outstanding has decreased to 48 days for the quarter compared with 82 days for the previous year period. At the same time, days payable outstanding went down to 84 days for the quarter from 90 for the same period last year.
Debt moves up marginally
Motorcar Parts of America, Inc. has witnessed an increase in total debt over the last one year. It stood at $40.51 million as on Sep. 30, 2016, up 2.33 percent or $0.92 million from $39.59 million on Sep. 30, 2015. Total debt was 9.26 percent of total assets as on Sep. 30, 2016, compared with 9.99 percent on Sep. 30, 2015. Debt to equity ratio was at 0.18 as on Sep. 30, 2016, down from 0.20 as on Sep. 30, 2015. Interest coverage ratio improved to 5.39 for the quarter from 0.12 for the same period last year.
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